According to documents filed this week with the US Bankruptcy Court in Houston, Dean Foods Company revealed that Dairy Farmers of America (DFA) is no longer the lead bidder in the upcoming bankruptcy sale.
Documents state that the Texas-based dairy processor and DFA agreed to “mutually terminate” the US$425 million asset purchase. The purchase would have included 44 of Dean’s frozen and fluid facilities, real estate, equipment, inventory, and associated delivery systems, along with various liabilities.
Dean Foods is owned by and serves more than 14,500 dairy farmer-members representing more than 8,500 dairy farms in 48 states.
Last month, DFA President and CEO Rick Smith announced that it had entered into an asset purchase agreement with Dean through which DFA would serve as the stalking horse bidder in the court supervised sale.
The deal was called off after objections from farmers and agriculture advocacy groups as well as members of DFA and Dean shareholders filed a legal document opposing the pending sale, citing concerns about prices, competition and antitrust issues.
While Dean shareholder Susan Poole says she is glad DFA is no longer the stalking horse bidder (which would set a minimum for the process), she’s afraid potential bidders won’t have enough financial information nor sufficient time to cast a bid.
“The judge seems to be rushing the bidding process through. He hasn’t requested that updated (Dean Foods) financials be released to the public or shareholders,” she said. “From what little financial information that we’ve seen, we believe with the increased demand in the dairy industry that Dean has a greater positive cash flow more than ever.”
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