J.Crew Shareholders Approve $3 Billion BuyoutThis is very interesting! Just awhile back, an influential shareholder adviser recommended that shareholders vote against the proposed buyout because of all the issues. Now it's all settled. Uh, okay. ;)
March 1, 2011
Shareholders of preppy clothing seller J.Crew Group Inc. have approved a $3 billion deal to be taken private by two investment firms.
The $43.50-per-share buyout by private-equity firms TPG Capital and Leonard Green & Partners is expected to close on or near next Monday. J.Crew CEO Millard (Mickey) Drexler, the former Gap Inc. chief credited with turning J.Crew around since coming aboard in 2003, will remain with the company.
Questions about how the deal was negotiated by Drexler had raised concerns the deal might not be approved. Proxy advisory firm Institutional Shareholder Services last week had recommended against the deal.
Hedge fund Mason Capital Management's managing member Michael Martino wrote to J.Crew's board on Feb. 11 and asked it to hold out for a higher offer. The firm has a 7.5 percent stake in J.Crew, which is based in New York. They said they would vote against the offer, according to an SEC filing.
J.Crew began an 85-day "go shop" period when it would entertain other bids after it agreed in November to be bought by TPG and Leonard Green. It extended the period by a month after settling a shareholder lawsuit challenging the acquisition. Even after the extension, J.Crew said it was in talks with some interested parties but did not receive any firm alternative bids.
J.Crew and Drexler have a history with TPG, which took a majority stake in J.Crew in 1997 and remained majority shareholder until the company went public in 2006.
Shares rose 45 cents to $43.53 in midday trading, pennies above the buyout price.
What are your thoughts on the deal? Are you surprised that this latest development is now occurring?