Ceres faces lawsuit over sale to Land ‘O Lakes
Thousand Oaks-based ag-biotech company Ceres Inc. is facing a lawsuit from shareholders angry about the company’s June 17 sale to Minneapolis-based Land ‘O Lakes.
In the lawsuit, which was filed in state court in Los Angeles on July 5, three shareholders allege the company unfairly sold the company to Land ‘O Lakes for $17.6 million.
“Despite the financial strength of the company and its position as a premier player in its field, the defendants have entered into the merger agreement with Land ‘O Lakes, depriving stockholders the opportunity to participate in the growth of the company they have loyally invested in,” the lawsuit reads.
Prior to the acquisition, Ceres had been in the middle of a restructuring program that changed the company’s focus from biofuels to food crops.
Some of the shareholders’ claims appear to lack merit. They claim in the complaint that Ceres was “on the upswing and starting to realize its real potential.” Through Feb. 29, the company had lost $336.5 million in its 20-year history. The company had also held five public offerings in the past five years as it struggled to stay afloat.
At the end of the second quarter, Ceres had just $5.8 million in cash and cash equivalents on hand and said it may need to hold another offering to carry the company past July 2016.
The lawsuit also says the merger agreement with Land ‘O Lakes limits the amount that shareholders could make because it includes a non-solicitation clause, which means the company must cease any solicitation of other offers. It’s not clear if other companies were bidding for Ceres.
Ceres could not be reached for comment.
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