Sealy Corp.'s directors and controlling shareholder KKR &Co. were accused in an investors' lawsuit of shortchanging themattress maker's stockholders by backing a $229 million buyout bidby rival Tempur-Pedic International Inc.

Tempur-Pedic, based in Lexington, Kentucky, agreed last month topay $2.20 a share for Trinity, North Carolina-based Sealy tocombine the two biggest publicly traded mattress companies.Investors allege Sealy and KKR executives didn't shop around forthe best price for the maker of Sealy Posturepedic mattresses andstructured the deal to discourage other bidders.

The deal “is not a value-maximizing transaction and is not theproduct of reasonable conduct by the Sealy board,” investors saidin the Delaware Chancery Court suit. “KKR has breached itsfiduciary duties as a controlling shareholder by pushing theproposed transaction to advance its own private interests.”

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