It’s official: Weehawken, NJ-based Hanover Direct is a privately held company has completed its going private transaction with Chelsey Direct following the approval of the merger agreement at Hanover’s shareholders’ meeting on April 12.
Wayne Garten will remain as Hanover’s president/CEO after the transaction. Last year the $415.7 million Hanover mailed 182 million copies of its Company Store, Company Kids, Domestications, Silhouettes, International Male, and Undergear catalogs.
Under the terms of the merger agreement, a wholly owned subsidiary of Chelsey merged with and into Hanover, which was the surviving corporation in the merger. The shares of Hanover common stock, other than shares owned by Chelsey and its affiliates and shareholders who elect dissenter’s appraisal rights, will be paid $0.25 per share.
The class action lawsuit brought by shareholders on Dec. 22 is still under way, although no timetable for the hearing has been set. Two Hanover shareholders filed an amended complaint in the Delaware Chancery Court alleging that the Hanover directors had conflicts of interest in approving the agreement with Hanover. The plaintiffs, Glenn Freedman and L.I.S.T., say that not only is the offered price too low but also that the defendants, which include Chelsey, Hanover, and Hanover’s directors, breached their fiduciary duties of due care and loyalty to the minority shareholders as well as their duty of full disclosure.