Sanderson Farms Shareholder Sues Company Over Unlawful Upcoming Merger

A suit was filed Wednesday in the Southern District of New York against poultry giant Sanderson Farms and its Board of Directors. The suit was filed by Sanderson Farms shareholder Alex Ciccotelli, who is alleging violations of the Securities Exchange Act of 1934 against the company and its Board of Directors.

Sanderson Farms is a producer, processor, marketer, and distributor of chicken. On August 9, 2021, a transaction was announced in which Sanderson Farms would be acquired by Walnut Sycamore Holding LLC, Wayne Farms LLC, and Sycamore Merger Sub LLC, merging the company with Wayne Farms as a subsidiary of agricultural giant Cargill. The transaction included an agreement in which Sanderson Farms’ stockholders would receive $203 in cash for each share of Sanderson Farms stock they owned.

The subsequent proxy statement that the defendants filed in relation with the proposed transaction is said by the plaintiff to have omitted “material information with respect to the Proposed Transaction, which renders the Proxy Statement false and misleading.” The proxy statement is believed by Ciccotelli to constitute violations of various sections of the Securities Exchange Act of 1934.

The alleged omitted material within the proxy statement is concerning Sanderson Farms’ financial projections and corresponding analyses, as well as principal information regarding Walnut Sycamore Holding, Wayne Farms, and Sycamore Merger Sub. Accurate projections, the plaintiff contends, are necessary because they allow stockholders to “better understand the financial analyses performed by the company’s financial advisor in support of its fairness opinion.”

The perceived inadequacies of the proxy statement have led the plaintiff, Ciccotelli, among other shareholders, to sue Sanderson Farms and its board of directors for two distinct violations of the Securities Exchange Act of 1934. Ciccotelli is seeking an injunction against proceeding with or consummating the proposed transaction until an adequate proxy statement is filed, a declaration of the expressed violations, litigation fees as well as other relief deemed proper by the court.

The plaintiff is represented by Rigrodsky Law.