The proposed takeover of Arden Group, the owner of regional US grocer Gelson’s Markets, is facing scrutiny from investors, with claims the US$126.50-per share offer undervalues the company.
A number of law firms, including the law offices of Vincent Wong and former SEC attorney Willie Briscoe, have launched investigations into whether the Arden board breached their fiduciary duties by failing to adequately shop the company to obtain the best value for shareholders.
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Gelson’s, founded in 1951, runs 17 stores in southern California.
When Arden unveiled the US$394m deal with TPG on 20 December, it said the price represented a 26% premium on its six-month average stock price and a 14% premium on the average stock price the previous day.
Arden shares closed at $125.61 on 19 December, the day before the proposed transaction was announced. Arden shares closed at $126.51 in New York on Tuesday (31 January), the most recent full day of trading.
Arden insisted the deal was the result of a “comprehensive process” in which it solicited interest in the company. The merger agreement was approved by all board members that were present and voting at the meeting, the firm added.
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