Books-A-Million, Inc. (NASDAQ:BAMM) Investor Files Lawsuit Against Directors In Effort to Stop The Proposed Takeover By The Anderson Family

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Company Name(s): 
Books-A-Million
Case Name: 
Books-A-Million Deal Case 05/04/2012
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: BAMM
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
05/04/2012
Summary: 

May 07, 2012 (Shareholders Foundation) -- An investor in NASDAQ:BAMM shares filed a lawsuit against directors of Books-A-Million, Inc in effort to block the proposed sale of the company to majority owner the Anderson family at $3.05 per share.

According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:BAMM stockholders arising out of their attempt to sell Books-A-Million, Inc at an unfair price via an unfair process.

On Monday, April 30, 2012, Books-A-Million, Inc. had announced that the Anderson family has made a non-binding proposal to acquire all of the outstanding publicly-held shares of the common stock of Books-A-Million, Inc. (NASDAQ: BAMM). According to the proposal, public shareholders would receive $3.05 per share in cash, representing a premium of approximately 20 percent over the closing price on April 27, 2012, and 13 percent over the average closing price of the Company’s common stock for the past 90 trading days.

However, the plaintiff alleges that the $3.05offer undervalues the company and is unfair to NASDAQ:BAMM stockholders. Indeed, the market reacted to the offer and sent NASDAQ:BAMM to as high as $3.24 on Monday, April 30, 2012, thus well above the $3.05offer. In addition, NASDAQ:BAMM shares traded as recently as April 3 as high as $3.18 per share and in March 2012 as high as $3.53 per share, thus also well above the current offer. Finally, at least one analyst has set the high target price at $12 per share.

In addition the plaintiff says the buyout process is unfair to NASDAQ:BAMM stockholders. In fact, the Anderson family, including Mr. Anderson who is the Executive Chairman of the Company d other members of the Anderson family, currently directly or indirectly control shares of stock representing, in the aggregate, approximately 53 percent of the common stock of the Company.