The Martin Marietta effect

2 August 2012 By Reynolds Holding, Jeffrey Goldfarb Follow @jgfarb

Martin Marietta forfeited a hostile bid after rival Vulcan successfully sued it for a confidentiality breach. Now, a Blackstone-owned firm is accusing a suitor of illegal blabbing. Leaks can be harmful, but dealmakers and their clients may also find they miss the chatter.

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Catalent Pharma Solutions, a portfolio company of private equity firm Blackstone Group, has accused rival Sharp and its Irish parent, United Drug, of breaching a confidentiality agreement covering a possible sale of the U.S. pharmaceutical packaging company. In a lawsuit filed on July 10 in New York, Catalent said United’s chief executive committed the breach by telling analysts on two conference calls in November 2011 that the company was for sale and underperforming.

United executives had allegedly participated in confidential discussions involving Sharp’s proposal to buy Catalent, potentially for $80 million. United responded that it was not covered by the agreement and “strongly refutes” the allegations.

Also on July 10, the Delaware Supreme Court issued an opinion affirming the decision of Chancellor Leo Strine which, in effect, blocked Martin Marietta’s $5.3 billion hostile bid for larger rival Vulcan Materials.

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