NEW YORK, April 15, 2019 (GLOBE NEWSWIRE) — Labaton Sucharow LLP (“Labaton Sucharow”) announces that on April 15, 2019 it filed a securities class action lawsuit, captioned Houston Municipal Employees Pension System v. Conagra Brands, Inc. No. 19-cv-02550 (N.D. Ill.) (the “Action”), on behalf of its client Houston Municipal Employees Pension System (“Houston Municipal”) against Conagra Brands, Inc. (NYSE: CAG) (“Conagra” or the “Company”), and certain officers and directors (collectively, “Defendants”).
The Action, which asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and SEC Rule 10b-5 promulgated thereunder, expands the class definition for Exchange Act claims asserted in the previously filed action captioned West Palm Beach Firefighters’ Pension Fund v. Conagra Brands, Inc., No. 19-cv-01323 (N.D. Ill.), brought on behalf of all persons or entities who purchased or otherwise acquired Conagra common stock from June 27, 2018 through December 19, 2018, inclusive (the “Class Period”), to specifically include legacy Pinnacle Foods, Inc. (“Pinnacle”) common stock holders who received Conagra common stock in exchange for their Pinnacle shares on October 26, 2018 upon completion of the Company’s acquisition of Pinnacle (the “Class Period”).
Conagra, based in Chicago, Illinois, manufactures and markets packaged foods for retail consumers, restaurants and institutions. The Company has a portfolio of well-known food brands including Reddi-wip, Hunt’s, Healthy Choice, Slim Jim and Orville Redenbacher’s.
On June 27, 2018, Conagra announced the acquisition of Pinnacle, in a cash and stock transaction valued at approximately $10.9 billion (the “Transaction”). Pursuant to the terms of the Transaction, Conagra was to pay approximately $5.1 billion in cash and issue approximately 77.45 million Company shares out of the Company’s treasury to former holders of Pinnacle common stock. Upon closing of the Transaction on October 26, 2018, Pinnacle common stock holders received $43.11 in cash and 0.6494 shares of Conagra common stock in exchange for each share of Pinnacle held. The implied consideration price for each share of Pinnacle was valued at $68.00 per share.
At the time of the Transaction and throughout the Class Period, Conagra represented the merger as a combination of two “growing portfolios” that would enhance Conagra’s multi-year transformation plan and expand its presence and capabilities in its most strategic categories, including frozen foods and snacks. Conagra highlighted their due diligence of the deal, the similar cultures and work ethics of the two companies, and the tremendous synergies of the deal.
Unbeknownst to shareholders, however, Conagra and its management were aware or recklessly disregarded that the Transaction would not result in anywhere near the sort of benefits that Defendants had publicly represented. Just a few weeks after the closing of the merger, on December 20, 2018, Conagra stunned the market by releasing its third quarter 2018 results, as well as an update on the performance of the newly merged company, which revealed that Pinnacle’s performance had been much worse than Defendants had previously represented. In addition, Defendants revealed that Pinnacle’s three leading brands had “suffered sales and distribution losses” in 2018, and accounted “for the vast majority of Pinnacle’s current challenges” due to self-inflicted subpar innovation and executional missteps.
As a result of the disclosure, on December 20, 2018, Conagra’s stock price fell $4.81 per share to $24.28, or nearly 17%, wiping out over $2.3 billion in Conagra’s market capitalization, continuing to fall precipitously over the following two trading days for a total decline of approximately 30%.
If you purchased or otherwise acquired Conagra common stock during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the Northern District of Illinois no later than April 23, 2019. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in the Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in the Action.
If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at [email protected].
Houston Municipal is represented by Labaton Sucharow, which represents many of the largest pension funds in the United States and internationally with combined assets under management of more than $2 trillion. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at www.labaton.com.
You can view a copy of the complaint here.
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