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Thursday, October 6, 2011

Del Monte, Barclays to pay $89.4 million in settlement, (NYSE: KKR), (BARC)

Del Monte Corp and Barclays Capital agreed on Thursday to pay $89.4 million to settle a lawsuit that claimed they had not acted in investors' best interests in the food company's $4 billion takeover. Lawsuits stemming from the takeover have raised conflict of interest issues and struck at the core of the relationship between banks and companies they advise, making boards and bankers nervous about how they run auctions. In the lawsuit, investors claimed that Barclays, which advised Del Monte on the sale, had a conflict of interest because it also arranged financing for the private equity buyers led by KKR and Co (KKR.N). Banks helping to sell businesses frequently offer financing to buyers, known as 'staple financing.' Del Monte will contribute $65.7 million and Barclays Capital, a unit of Barclays Plc (BARC.L), will pay $23.7 million to Del Monte's shareholders, the investors' lawyers said in a statement on Thursday.

Shares of KKR traded higher by 1.92% or $0.2/share to $10.59. In the past year, the shares have traded as low as $8.95 and as high as $19.16. On average, 2261900 shares of KKR exchange hands on a given day and today's volume is recorded at 1206408.