Martin Marietta Materials Inc. (MLM:US) won an accelerated appeal from the Delaware Supreme Court in a hostile takeover case against rival gravel-producer Vulcan Materials Co. (VMC:US) as its shares fell the most in three years, halting trading.
In an order today, Justice Henry duPont Ridgely set arguments in the appeal for May 25 in Wilmington, and asked for final case briefs the day before.
Ridgely granted the fast-track schedule based on lawyers’ motions and “good cause therefore having been shown” to speed up the appeal.
The trading halt, and an 8 percent drop in the shares, came after Greenlight Capital Inc. Chairman David Einhorn questioned future profits at Martin Marietta and “problems” after the failed Vulcan bid.
Martin Marietta offered in December to exchange half a share for each share of Vulcan in a deal that would have created the world’s largest producer of sand, gravel and crushed stone. The company said May 14 it withdrew the offer.
Martin Marietta sued on Dec. 12, the same day it made the hostile bid, in a preemptive move to get the court to rule that the offer wasn’t prohibited by a May 2010 confidentiality agreement between the companies. Vulcan countersued.
After a bench trial in February, Delaware Chancery Court Judge Leo Strine Jr. on May 4 blocked Martin Marietta for four months from making a hostile bid for Birmingham, Alabama-based Vulcan, ruling that Martin Marietta violated the agreement. Martin Marietta, based in Raleigh, North Carolina, appealed.
Don James, chairman of Vulcan, told Strine during the trial that in 2010 he had envisioned a friendly “merger of equals.” The talks foundered before Martin Marietta Chief Executive Officer Ward Nye disclosed the hostile bid, with a major sticking point being who would run the new company, according to Strine.
Martin Marietta spokeswoman Andrea Calise couldn’t immediately comment on the ruling.
Commenting on the appeal, Jamie Tully, a spokesman for Vulcan Materials, said in an e-mailed statement that Strine handed down a “thoughtful decision, and the right decision.”
Martin Marietta fell 8.2 percent to $68.60 in New York Stock Exchange composite trading. Vulcan fell 8 percent to $35.26 on the NYSE.
The case is Martin Marietta Materials v. Vulcan Materials, CA7102, Delaware Chancery Court (Wilmington).
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