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KKR's Gardner Denver to pay $29 million to settle suit

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(Reuters) — Gardner Denver has agreed to pay $29 million to its former shareholders to settle allegations the industrial pumps producer was undervalued in its $3.7 billion sale last year to private equity firm KKR & Co., according to court documents.

The settlement, reached after two days of mediation in Chicago earlier this month, was filed on Friday in a Delaware court and must still be approved by a judge.

Shareholders sued Gardner Denver, its board and KKR, saying the sale price was too low.

The shareholders accused KKR of tainting the sale process by hiring Gardner Denver's former CEO, Barry Pennypacker, shortly after he resigned in July 2012. KKR, the shareholders alleged, "improperly obtained confidential information from Pennypacker" that informed KKR's bid.

Lawsuits typically follow merger and acquisitions, but most of them are dismissed or settled for no additional money.

A spokeswoman for KKR said the firm does not comment on litigation.

Randall Baron, an attorney for the plaintiffs, said in an email the settlement was "a very good result for shareholders in what would have been a very challenging case."