Robbins Arroyo LLP: Acquisition of ANN INC. (ANN) by Ascena Retail Group, Inc. (ASNA) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed acquisition of ANN INC. (NYSE: ANN) by Ascena Retail Group Inc. (NASDAQ: ASNA). On May 18, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Ascena will acquire ANN. Under the terms of the agreement, ANN shareholders will receive 0.68 shares of Ascena stock and $37.34 in cash, for a combined value of $47.00 for each share of ANN common stock.
Is the Proposed Acquisition Best for ANN and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at ANN is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $47.00 merger consideration represents a premium of only 22.0% based on ANN’s closing price on April 20, 2015. This premium is significantly below the average one month premium of nearly 30.1% for comparable transactions within the past five years. Further, the $47.00 merger consideration is below the target price of $48.00 set by an analyst at Mizuho Securities USA Inc. on March 13, 2015.
On March 13, 2015, ANN reported strong earnings results for its fourth quarter 2014. Net sales were $647.4 million, a 3.9% increase over the fourth quarter 2013. Total ANN comparable sales for the quarter increased 1.0% on top of an increase of 2.9% in the fourth quarter of 2013. ANN beat consensus analyst estimates for adjusted EPS in three out of the last four quarters. In commenting on these results, ANN President and Chief Executive Officer Kay Krill remarked, “Despite a highly promotional and competitive environment, ANN INC. achieved positive comparable sales and effectively managed expenses in the fourth quarter, generating bottom-line results that came in slightly ahead of the outlook we provided in November. In addition, we delivered on our commitment to clear excess inventory, entering fiscal year 2015 in a healthy position in all channels.”
In light of these facts, Robbins Arroyo LLP is examining ANN’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
ANN shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
ANN shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.