Acquisition of The Jones Group Inc. by Sycamore Partners May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the acquisition of The Jones Group Inc. (NYSE: JNY) by affiliates of the private equity firm Sycamore Partners. On December 19, 2013, the two companies announced the signing of a definitive merger agreement pursuant to which Sycamore Partners will acquire all outstanding shares of The Jones Group common stock for $15.00 per share in cash.
Is the Proposed Merger Best for The Jones Group and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at The Jones Group is undertaking a fair process to obtain maximum value and adequately compensate The Jones Group shareholders in the merger.
As an initial matter, the $15.00 the merger consideration is substantially below the target price of $17.00 maintained by an analyst at Stephens Inc. since initiating coverage on July 23, 2013. In addition, The Jones Group traded over the offer price as recently November 7, 2013, and traded as high as $17.78 on August 5, 2013.
In relation to the company’s third quarter 2013 financial results released on October 30, 2013, Wesley R. Card, The Jones Group’s Chief Executive Officer, commented, “We believe that we are well-positioned for the fourth quarter and early 2014 as we continue to execute on our strategic plan. We have received positive reactions from wholesale customers to our enhanced products across our brands that will ship in the fourth quarter of 2013 and Spring 2014. We are confident that continued product improvement will translate into improved retail performance and, ultimately, increased profitability.”
Given these facts, Robbins LLP is examining The Jones Group board of directors’ decision to sell the company to Sycamore Partners now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects, and whether they are seeking to benefit themselves.
The Jones Group shareholders have the option to file a class action lawsuit to ensure the board of directors properly evaluates the proposal to obtain the best possible price for shareholders and the disclosure of material information.
The Jones Group 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.