Opinion ID: 389315
Heading Depth: 4
Heading Rank: 1

Heading: CHH's $36.00 Offer of December 12, 1977.

Text: 88 The plaintiffs allege one omission of material fact and two misrepresentations in relation to Field's response to the CHH letter of December 12, proposing a merger of the two companies at $36.00 per share. The plaintiffs assert that the defendants' press release of December 12, 1977, omitted a material fact when it failed to disclose that the $36.00 offer was merely the basis for negotiations. That the offer, however, was only a basis for negotiations was clearly indicated in CHH's press release announcing the $36.00 proposal. (The) plaintiffs cannot complain merely because (Field's) did not re-emphasize facts that might have been helpful to (CHH) in its tender offer 'although such facts would have been known to the ordinary investor through papers of general circulation.'  Berman v. Gerber Products Co., 454 F.Supp. 1310, 1327 (W.D.Mich.1978), quoting Gulf & Western Industries, Inc. v. Great A & P Tea Co., 356 F.Supp. 1066, 1071 (S.D.N.Y.), aff'd 476 F.2d 687 (2d Cir. 1973). We therefore hold that this omission fails to meet the standard of materiality set forth in TSC Industries, supra. 89 The plaintiffs also contend that although the Field's press release of December 14, 1977, called the $36.00 proposal inadequate, no one had ever analyzed the offer as inadequate, and that the defendants therefore misrepresented the attractiveness of the $36.00 offer. In light of the evidence that Field's investment bankers clearly indicated at the board meeting their belief (subsequently vindicated by the $42.00 offer) that a higher price could be obtained, and the board's knowledge of Carter's statement that a $60.00 offer might be forthcoming from a foreign company at any time, it was reasonable for the board to find that the $36.00 price was inadequate. We therefore hold that no reasonable juror could find Field's statements as to the adequacy of the $36.00 offer deceptive. 90 Finally the plaintiffs contend that in the December 20, 1977, press release, Field's misrepresented the nature of the consideration it had given the CHH proposal of December 12, when it stated that the board had rejected the offer only after careful consideration. The plaintiffs first point to the board minutes of October 13, 1977, which reflect the board's decision that any merger with CHH should not be considered. It is disingenuous of the plaintiffs to point to this statement, which reflects the board's reaction to preliminary informal contacts (one of which was made to the ninety-three year old father of one of the board members) made only days after the unexpected death of Burnham, Field's Chairman and Chief Executive Officer. Particularly in light of the uncontroverted evidence that on December 13, prior to the issuance of this press release, the Field's board met for several hours solely to consider the CHH approach, and to receive the analysis and advice of counsel, management, and investment bankers to aid that consideration, no reasonable juror could find that Field's management did not sufficiently carefully consider the CHH December 12, 1977 proposal. See Northwest Industries, Inc. v. B. F. Goodrich Co., 301 F.Supp. 706, 709 (N.D.Ill.1969) (board consideration of multimillion dollar defensive acquisition during first hour of luncheon meeting sufficient to render its decision conclusive). Furthermore, even if the defendants did reject the proposal without the careful consideration the evidence unquestionably establishes they did, this decision would be insulated from federal securities law scrutiny by the rule of Santa Fe Industries. 91