Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Libbey Inc.’s acquisition of Anchor Hocking may be in jeopardy because a federal judge has failed to rule promptly on the government’s antitrust objections. U.S. District Judge Reggie B. Walton in Washington, D.C., had promised to rule by mid-March on the Federal Trade Commission’s petition for an injunction to block the $277 million deal. But five weeks have passed since the deadline, and the judge has yet to release the decision. The delay may hand the FTC a victory. At the Feb. 25 trial, Libbey lawyer James Kearney told the court that the financing for the deal expires April 30. “We will have to close this transaction and have the time to close this transaction before that funding goes away,” Kearney told the court. “At the end of this financing, the deal is dead.” Even a verdict within the next few days may not be enough to save the transaction. Any appeal by the FTC or companies would likely take about four weeks. That would mean the companies would be unable to close until late May, weeks after the financing expires. Walton appeared to recognize this problem at trial. “Assuming I were to rule in [Libbey's] favor, I assume the FTC is going to appeal,” Walton said. “And if they appeal what impact does that have on the funding situation?” Kearney responded that the April 30 funding deadline remains, adding that the risk of an appeal is why the companies need a decision by March 30. “I will try to decide it as quickly as I can,” Walton said. An FTC spokesman declined to comment on whether the agency would seek an expedited appeal if it lost. Kearney told the court that Libbey is spending $100,000 a month to keep the financing in place for Anchor Hocking, a glassware manufacturer the company agreed to buy from Newell Rubbermaid Inc. last June for $332 million in cash. He also said the merger funding was tied to a larger refinancing of company debt that could not be delayed further. Libbey chief financial officer Kenneth Wilkes and Libbey treasurer Kenneth Boerger did not return calls for comment. A clerk in Walton’s chambers said the judge had no comment. Kearney also declined to comment. But “Financing is still an issue,” a source close to the matter said. “There are no two ways about it.” Libbey, a Toledo, Ohio-based glassmaker, said April 1 in a filing with the Securities and Exchange Commission that it expected the decision to be issued in time to close the deal by April 30. “Libbey has vigorously defended its rights in the federal court proceeding, which remains undecided,” it said. “The company anticipates the suit brought by the FTC will be resolved and the closing of the transaction will occur before April 30.” Failure to close the deal would force the company to write off $11 million to $12 million in acquisition costs, Libbey said in the filing. Libbey also disclosed that it entered into new senior credit facilities on Jan. 31 for $575 million to finance the deal and replace an existing bank credit agreement. If the Anchor Hocking deal is aborted, Libbey said it would be forced to abandon the Jan. 31 funding agreement. Instead, this month it would refinance its existing bank credit agreement, which expires May 1. Following the June deal between Libbey and Freeport, Ill.-based Newell Rubbermaid, the FTC voted Dec. 18 to block the transaction, arguing it would permit Libbey to raise prices for glassware sold to restaurants. Libbey responded Jan. 3 by restructuring and re-pricing the deal to exclude Anchor Hocking’s food-service business, which would remain with Newell. The FTC called the restructuring a “sham” and filed suit Jan. 14 to stop the deal. Copyright (c)2002 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.