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INDIANAPOLIS -- Regional independent Marsh Supermarkets, Inc. yesterday opposed the competing acquisition offer by investment firms Cardinal Paragon, Inc. and Drawbridge Special Opportunities Advisors, LLC, but will "continue to monitor any developments" in the future.
Marsh entered into a merger agreement on May 2 with MSH Supermarkets Holding Corp., an affiliate of private investment fund Sun Capital Partners Group IV, LP after having conducted a six-month public process to consider strategic alternatives, including a sale.
As part of the process, Cardinal had entered into a confidentiality agreement with Marsh that contains standstill provisions under which Cardinal agreed not to make an offer to acquire Marsh without Marsh's prior consent. The merger agreement with MSH contains a covenant prohibiting the Marsh from waiving or failing to enforce any standstill agreement without the prior consent of MSH. While Marsh has requested MSH to consent to its granting the request of Cardinal Group, MSH and Marsh haven’t been able to reach an agreement on the terms under which MSH would provide its consent.
On May 30 Marsh announced the receipt of letters from the Cardinal Group in which the investment firm requested that the retailer consent to its making a proposal to acquire the retailer for $13.625 per share, subject to completion of due diligence, and otherwise on substantially the same terms as the MSH merger agreement.
Under the MSH merger agreement, if a competing transaction has been publicly disclosed, MSH would have the right to terminate the merger agreement and receive a $10 million termination fee from Marsh if it failed to issue a press release announcing its opposition to the competing transaction within 10 business days.