* Companies present closing arguments on hostile bid
* Judge batters both sides during six-hour hearing
* Judge says will not rule immediately
By Tom Hals
WILMINGTON, Del, April 9 (Reuters) – The legal fight over
Martin Marietta Materials Inc’s $5.4 billion hostile bid
for Vulcan Materials Co “is a hall of mirrors,” the
Delaware judge overseeing the dispute said on Monday.
He added he is unlikely to rule immediately on whether the
hostile bid can proceed.
Lawyers for the two makers of building materials presented
their closing arguments to Chief Judge Leo Strine of Delaware’s
Chancery Court, who also must decide if a proxy contest for four
seats on the Vulcan board can proceed.
At the center of the dispute are Vulcan’s claims that its
rival breached two confidentiality agreements that covered
information shared between the companies when they entered
merger talks in April 2010.
Those talks broke off in June 2011, and Martin Marietta
launched its unsolicited, all-stock bid for Vulcan in December.
Martin Marietta has argued that creating the world’s largest
producer of sand, gravel and other building materials would
provide up to $250 million in cost savings.
Vulcan rejected that bid and said Martin Marietta, in
formulating its hostile bid, used information that was meant to
be kept secret and that it also publicly disclosed confidential
information.
Strine spent most of the six-hour hearing prodding Robert
Zimet of Skadden, Arps, Slate, Meagher & Flom LLP, which
represents Martin Marietta, over the way his client disclosed
nonpublic information, such as history of the merger talks.
“You’re briefs don’t come close to justifying the
blow-by-blow disclosures,” the judge told Zimet. “We’re not
going to get where you want by acting like I’m a fool,” he said
after Zimet suggested the disclosures were required by
regulators.
Strine wrestled with Zimet over the way Martin Marietta
raised its internal projections for synergies after a meeting
with Vulcan managers at which confidential information was
provided on staffing and software licenses.
Zimet said witnesses attributed higher synergy estimates to
a more aggressive process of analysis, not the use of
confidential information.
Strine had his doubts.
“I have the testimony from them, but when I have the
documents … none of them back up that story,” he said.
Strine also hammered away at Vulcan’s legal team.
He sparred with William Savitt of Wachtell, Lipton, Rosen &
Katz LLP, who argued the confidentiality agreements did not
allow Martin Marietta to use nonpublic information for a hostile
bid.
Savitt said that was because the hostile bid was between
Marietta and Vulcan’s shareholders, not between the two
companies that signed the agreement. Strine scoffed at his
logic.
“Doesn’t that make your reading less obviously the right
one?” he asked.
Savitt offered a different interpretation of the agreement
after a lunch break, saying the agreement was limited to a
combination of companies agreed to by both boards, which still
excluded Martin Marietta’s hostile bid.
“That is substantially different from what you said before,”
Strine pointed out.
Strine did not say when he might rule, but suggested it
would not be before next week.
The case is Martin Marietta Inc v Vulcan Materials Inc,
Delaware Chancery Court, case no. 7102.
