March 1 Vote Set for J. Crew Sale

Is it really over? Technically, the March 1 shareholder vote will determine the new owners of apparel cataloger/retailer J. Crew.

But the company announced the expiration of an 85-day “go shop” period, which – after 59 companies were solicited, and four parties negotiated – yielded no new offers.

So where does this leave us? Where we started back in November when the J. Crew Group announced it was being acquired by funds affiliated with TPG Capital and Leonard Green & Partners for $43.50 per share in cash, or a total of nearly $3 billion.

After the November announcement, several law firms issued statements indicating they were investigating the deal on behalf of J. Crew’s shareholders, who didn’t feel the company was commanding a big enough price.

The investigations aim to determine whether J. Crew’s board of directors breached its fiduciary duties to its stockholders by failing to adequately shop the company before agreeing to the transaction. Shareholders filed complaints questioning whether J. Crew CEO Millard Drexler, who began negotiating with the buyout firms months before the deal became public, got a fair price from TPG and Leonard Green.

With no other offers on the table, shareholders will vote on March 1, says Chris Kampe, managing director with investment firm Tully & Holland. “I believe the TPG/Green deal will proceed at that point.”

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