Dean Foods gets $425 million lead bid from Dairy Farmers of America

By Caroline Salls

Pittsburgh, Feb. 18 – Dean Foods Co. has designated Dairy Farmers of America, Inc. as the stalking horse bidder for its assets, according to a notice filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.

Under the stalking horse bid, Dairy Farmers of America has agreed to pay $425 million for the assets and assume related liabilities. The purchase price consists of $322 million in cash consideration and payment of cure costs associated with assumed milk contracts in the amount of $103 million and a reduction in administrative claims held by the stalking horse bidder of up to $62.5 million.

If Dairy Farmers of America is not the winning bidder for the assets, Dean Foods will pay it a $15 million break-up fee and reimburse up to $8 million of its sale-related expenses.

Under the bid procedures approved by the court on Monday, indications of interest from competing bidders are due by 4 p.m. ET on March 31.

Final bids are due by 4 p.m. ET on April 13 and must at least equal the stalking horse bid, plus the bid protections amount and a $5 million overbid.

An auction will be held on April 20, if necessary, and the sale hearing is scheduled for April 27.

Dean Foods is a Dallas-based food and beverage company. The company filed bankruptcy on Nov. 12 under Chapter 11 case number 19-36313.

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