Collective Brands Inc. (NYSE:PSS) Investor Files Lawsuit Against Directors Over Alleged Breaches Of Fiduciary Duties In The Proposed Takeover

If you purchased shares of Collective Brands Inc. (NYSE:PSS) prior to May 1, 2012 and currently hold any of those NYSE:PSS shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Collective Brands
Case Name: 
Collective Brands Deal Case 05/07/2012
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: PSS
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
05/07/2012
Summary: 

May 08, 2012 (Shareholders Foundation) -- An investor in NYSE:PSS shares filed a lawsuit against directors of Collective Brands Inc seeking to block the proposed takeover by Wolverine Worldwide, Blum Capital Partners and Golden Gate Capital at $21.75 per share

The plaintiff alleges that the defendants breached their fiduciary duties when they agreed to sell Collective Brands Inc to Wolverine Worldwide at $21.75 per share.

On Tuesday May. 1, 2012, Collective Brands, Inc. and a consortium comprised of Wolverine Worldwide, Blum Capital Partners and Golden Gate Capital announced that they have entered into an agreement under which Collective Brands will be acquired for $21.75 per share in cash, or a total of approximately $2.0 billion, including the assumption of debt.

Collective Brands, Inc said the $21.75offer represents a 104% premium to the 30-day volume weighted average trading price prior to the August 24, 2011 announcement that Collective Brands’ Board of Directors, together with management, would conduct a review of strategic and financial alternatives.

However, the plaintiff claims that the offer undervalues the company and its unfair to NYSE:PSS stockholders. In fact, NYSE:PSS shares traded in February 2011 as high as $23.44 per share and in 2010 as high as $25.99 per share, thus asking certain stockholders to hand over their NYSE:PSS shares at a discount. Furthermore, so the plaintiff, the offer deprives Collective Brands’ public shareholders of the ability to participate in the company’s long term prospects. Indeed, Collective Brands’ financial performance improved over the past recent years. Its Total Revenue rose from $3.3billion for a 52weeks period ending on Jan. 30, 2010 to $3.46billion for the 52weeks period ending on Jan. 28, 2012.