As part of a shareholder lawsuit settlement, Alberto Culver (ACV) has opened itself up to other potential bidders, but this news does little to dissuade us from thinking that the pending acquisition by Unilever (ULVR) is essentially a done deal. The shareholder lawsuit argued that Alberto failed to adequately seek out other offers, negotiating with Unilever in such a way that effectively precluded other interested parties from submitting a superior bid. We're not in a position to comment on what Alberto did behind the scenes before receiving the $37.50 per share takeout offer from Unilever--a 19% premium to the company's stock price at the time and a 34% premium to our fair value estimate--but apparently the shareholder group believes the company wasn't sufficiently transparent in soliciting the offer.
Given the complexity of negotiating these kinds of deals (without leaking information, no less) and Alberto's solid record of stewardship over decades, we don't take issue with how the deal transpired. Unilever's offer is a healthy reward for shareholders and a solid strategic fit for both firms, which is of paramount importance. Regardless, with the lawsuit settled, the breakup fee for the deal has been reduced and Unilever's matching rights have been eliminated. The shareholder vote on the deal has been delayed until Dec. 17, giving other potential suitors additional time to make a superior bid. We would be highly surprised if this were to happen.