X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The combination of a huge spike in Purina Mills Inc.’s stock price over the past two weeks and the company’s reticence about the identity of a suitor is enough to invite an investigation by Nasdaq as a prelude to any wider U.S. Securities and Exchange Commission action, says a former senior SEC official. Purina’s shares trade on the Nasdaq, whose stock watch normally will investigate to see if a non-Nasdaq member is making purchases leading to such steep rises, said the former SEC official, who asked not to be named. If a non-Nasdaq member is making the purchases, there’s a fair chance the SEC will explore the connection between that buyer and Purina, the official said. “There’s a 95 percent chance that they’ll get caught if anything fishy has been going on,” he said, adding that such investigations usually take from two to five years. A Nasdaq press official said the stock watch conducts such examinations regularly, but she wouldn’t comment on the Purina situation. Purina officials didn’t return calls, but industry sources said it’s suspicious that Tuesday’s mystery bidder followed a price surge. The St. Louis-based company’s Tuesday announcement that it received an offer for the company came after the animal feed maker’s stock enjoyed higher closes for several days in a row. The stock closed at $10 a share April 20, before reaching a 52-week high of $18.30 a share Tuesday. Purina said in a release Tuesday that still several issues must be addressed with the suitor’s proposal, including due diligence and approval by both boards. Though there’s been speculation about rivals Archer-Daniels-Midland Co., ConAgra Inc. and privately-held Cargill Inc. being possible suitors, one banker familiar with agricultural deals said that these companies aren’t normally secretive. “Whoever is running the sale had a leak,” the banker said. “Because of the [stock] run-up here and all the people talking, the SEC could be all over it.” Koch Industries Inc. bought Purina for $670 million. Purina filed for bankruptcy in October 1999. Since emerging from bankruptcy in June, the Food and Drug Administration has slapped the company with warnings. The first involved the sale of animal feed containing banned ingredients that could possibly lead to mad cow disease. A second came in March, with the FDA alleging the company didn’t follow regulations regarding use of medications in animal feed. Copyright (c)2001 TDD, LLC. All rights reserved.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.