Despite looming antitrust hurdles, Energizer Holdings Inc. is one step closer to acquiring a bankrupt shaving products competitor after the U.S. Bankruptcy Court for the District of Delaware granted Energizer permission to bid on American Safety Razor Company.

American Safety filed for Chapter 11 bankruptcy protection on July 28, citing increased competition and the loss of customers, namely Wal-Mart Stores Inc., as the primary reason for its recent difficulties.

Judge Mary F. Walrath determined that the prior auction, won by American Safety’s first-lien lenders with a bid to forgive a claim to $244 million, too narrowly restricted the field of potential bidders.  Upon recognition of Energizer’s earlier $301 million cash bid, the court determined that a new auction must commence in order to maximize the amount paid by the victor.  Judge Walrath indicated that Energizer must be given sufficient time to engage in due diligence prior to the next auction.

American Safety Razor previously determined that Energizer’s cash bid was inadequate, particularly given the level of antitrust scrutiny that may follow.  Given the court’s current posture, the attractiveness of inviting Energizer to the auction table apparently outweighed the risk of future antitrust issues should Energizer prevail.

Energizer, the maker of Schick razors and other shaving products, currently holds a strong position in the razor market, second only to Proctor & Gamble’s powerhouse, Gillette.  American Safety Razor is one of the leading producers of razor blades and personal care products, with sales to supermarkets and other merchants under both retailer names and American Safety’s brand names.  The acquisition of New Jersey-based American Safety would allow Energizer to increase its market share substantially through strategic expansion and broaden its opportunity to reach consumers.

Regardless of whether Energizer is ultimately successful in the next auction, the ripples from this decision may be seen far from Delaware.  Given the recent financial woes of many companies, surviving competitors with the means to expand may have a stronger claim to be invited to the auction block.  Moreover, the behavior of management of a bankrupt company may be scrutinized more closely to ensure that all necessary and appropriate efforts are made to accommodate bidders, even competitors.

It is unclear who will win the next auction and what level of antitrust scrutiny will follow should Energizer succeed, but if Energizer is successful its brand presence and market share will keep growing and growing and growing ….

The United States District Court for the Southern District of Florida has denied a motion by class action plaintiffs in the In re Marine Hose Antitrust Litigation case to take “trial depositions” of foreign-based witnesses by telephone, including corporate executives residing in Japan, France, and Italy.   

The executives are employees of corporations that are in the process of settling the ongoing class action, which alleges an international price-fixing scheme in the marine hose industry.  In their motion, plaintiffs claimed they only want to ask the executives questions regarding the authenticity of business records and summaries of U.S. sales figures.  Plaintiffs argued that telephone depositions will save the settling defendants time and money and conserve judicial resources.

Not surprisingly, the non-settling defendants didn’t see it the same way.  In their response, defendants argued that plaintiffs are seeking to reopen discovery, the deadline of which has already passed.  Defendants also pointed out that plaintiffs had ample opportunity to ask such questions and had neglected to do so.

Defendants also looked outside of pretrial procedure, and U.S. law in general, for perhaps their most compelling objection.  They cited to the U.S. State Department website, which indicates that Japan doesn’t allow telephone or video conference testimony.  In addition, France and Italy require parties to seek the approval of government officials prior to taking testimony in their territories.

The court agreed with the defendants but did not venture into foreign law and procedure. In a two-page order, the court simply stated that the discovery deadline had passed. “The Plaintiffs knew that this testimony could be needed for use at trial, but failed to act within this Court’s schedule.”  Accordingly, the plaintiffs will have to offer the testimony at trial, and the foreign executives will be making a trip soon to Miami.

The U.S. Department of Justice has announced the first guilty pleas in its ongoing investigation into a price-fixing cartel in the worldwide refrigerator compressor market.

According to the DOJ, Japan-based Panasonic Corp. and Embraco North America Inc., a Brazilian subsidiary of Whirlpool Corp., agreed to pay $49.1 million and $91.8 million respectively for a price-fixing conspiracy that lasted from October 2004 until December 2007.

Both companies stake claim to significant shares of the worldwide compressor market with Panasonic occupying 13% and Embraco holding 25%.  Embraco will also pay a $56.5 million fine in Brazil for anticompetitive conduct.  The DOJ has not indicated whether other manufacturers will be entering additional guilty pleas in the near future.

Australian mining giant BHP Biliton Ltd. Has won its first regulatory approval – from U.S. antitrust authorities – in its $39 billion dollar hostile bid to take over Canada’s Potash Corp., the world’s largest producer of potash, a key crop nutrient used in fertilizer.   

BHP has announced that the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice have terminated the HSR mandatory waiting period early, permitting BHP to proceed with its bid.  BHP still requires antitrust clearance from other regulatory authorities, including Canada’s Competition Bureau, which has sought further information regarding the proposal, and the Investment Canada review, for which BHP must prove its offer is of “net benefit to Canada.”  

Despite these remaining regulatory hurdles, BHP has stated that it “remains confident” that it will secure the remaining antitrust approvals necessary to complete its takeover.

In its bid, BHP seeks to acquire all of the issued and outstanding common shares of Potash along with any associated rights under Potash’s Shareholder Rights Plan.  BHP offered Potash shareholders $130 per-share, a 20 percent premium over the NYSE August 11 closing price.  Potash rejected BHP’s offer as too low, commenting that BHP’s bid was “grossly inadequate” and “highly opportunistic.”  Potash’s board of directors has publicly encouraged its shareholders to reject the bid.  

To further block BHP from acquiring Potash, Potash set up a “poison pill” policy on its shares to block any bidder from completing a hostile takeover.  The “poison pill” is triggered by an unasked-for purchase of over 20 per cent of its shares.  In that instance, Potash would automatically flood the market with cut-price shares that would be offered to every shareholder other than the unsolicited bidder.  This has the effect of diluting the value of the unsolicited bidder’s stake. 

Potash has also filed a complaint in federal court alleging that BHP has engaged in various federal securities violations.  Specifically, Potash alleges that BHP has made false and misleading statements to manipulate stock prices and mislead stockholders.  Potash claims that BHP attempted to erode the stock prices by disseminating phony plans to enter the potash industry, which, if true, would flood the market with potash and devalue Potash’s stock.  

BHP responded to the allegations by saying that “this lawsuit is entirely without merit and we will contest it vigorously.”  BHP further stated that Potash seeks to “deprive its shareholders of a fully financed all-cash offer” and that the lawsuit will not “interfere with or delay our offer.”  

BHP’s offer has been extended to November 18, 2010 to allow completion of the regulatory review in Canada.

Employees at six high-tech companies can be expecting more cold calls with job offers, thanks to a settlement engineered by the U.S. Department of Justice (“DOJ”).

DOJ’s Antitrust Division has reached a settlement agreement with Apple, Google, Intel, Adobe, Intuit, and Disney’s Pixar unit, which will enable those companies to compete more vigorously for each other’s employees.  According to the DOJ, the settlement “prevents them from entering into no solicitation agreements for employees.”  In other words, no more agreements to refrain from cold-calling competitors’ workers.

DOJ has filed an antitrust complaint in U.S. District Court for the District of Columbia, along with the proposed settlement, which, if approved by the court, would resolve the lawsuit.

The complaint alleges that the six companies entered into agreements that restrained competition between them for highly skilled employees.   The agreements between Apple and Google, Apple and Adobe, Apple and Pixar and Google and Intel prevented the companies from directly soliciting each other’s employees.   An agreement between Google and Intuit prevented Google from directly soliciting Intuit employees.

The oldest of the agreements dates back to 2006.  If approved by the court, the agreement will govern the companies’ activities for five years.

Reports that a settlement between Justice and tech companies might be in the works began to surface last week.  And reports that the employment practices might have violated antitrust law began circulating last year. The now defunct policies allegedly violated antitrust laws by restraining competition among workers in high-tech fields, limiting their ability to move up in their careers, and ultimately slowing the pace of innovation and efficiency in technology markets. 

Incentives exist for technology companies to try to hang onto their workers, given that companies often collaborate with each other on technology projects, which gives workers plenty of opportunities to get to know potential new bosses.  Even so, DOJ has indicated that it has no plans to file similar suits against such companies as Yahoo, Microsoft, IBM, and Genentech.