Their love blossomed in Memphis…

October 17, 2006

memphis.jpgBack in the dog days of August, Monsanto (MON) announced that it was acquring Delta & Pine Land (DLP) for $1.5 billion in cash. But what’s interesting is the merger proxy that Delta filed on Friday, which provides a blow-by-blow on the mating dance between the two companies that had tried to hook-up back in 1998. Since then, the two companies have been co-defendants in several lawsuits as well as partners in something called D&M Partnership, which had been 90% owned by DP&L.

As the filing notes, DP&L CEO  W. Thomas Jagodinski expected to meet Monsanto CFO Terrell Crews in Memphis on July 20 to discuss some of the lingering legal disputes between the two companies. Jagodinski even brought along his attorney from Resolution Counsel. But Crews said Monsanto wasn’t interested in fighting anymore. In Memphis, Crews offered a measly 7.6% premium over DP&L’s stock, which at the time was trading just shy of $33. Jagodinski said that wasn’t enough and expressed concerns about antitrust issues, which had derailed the deal before. While all of this was going on, DLP’s stock began to percolate as representatives of the two companies continued to meet to discuss the potential deal. We’re sure that was entirely coincidental, of course. In a call on Aug. 5, Jagodinski said the company was worth "$40  or more a share" and by Aug. 13, Monsanto was offering $42 a share. Timing was important here because the two companies were supposed to meet in an arbitration hearing on Aug. 14.

Other goodies of the DP&L also secured a $600 million "termination fee" in case Monsanto isn’t able to get antitrust approval. And Jagodinski, who held out for more money for investors, will wind up with over $11 million in options and restricted stock and, perhaps the piece de resistance: a new change in control agreement that was signed on Aug. 25, or 10 days after the merger was announced. That agreement provides for three years of salary and bonus or around $2.5 million, plus a 20% premium to cover "accounting services", which ought to make Jagodinski’s accountant pretty happy. There’s also a bunch of nice door prizes, including a laptop, mobile phone, car and several other goodies of an unspecified value.

Who knew a conference room in Memphis could be so romantic? 

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