Restoration Hardware Class Action Payout Still Leaves Shareholders Short
This entry was posted on 6/19/2008 7:29 AM and is filed under Class Action.
Shareholders of Restoration Hardware (RSTO) are the beneficiaries of a class action lawsuit against the buyout that saw the firm go to the low private equity-backed bid rather than the higher bid from Eddie Lampert’s Sears Holdings (SHLD). Shareholders will receive an extra $0.19 per share from the litigation in addition to the $4.50 merger consideration. After legal fees, total payout should be roughly $4.63, a 2.9% increase over the price negotiated by the board. Nothing to make you rich, but a lot more than the annual dividend yield of the S&P index. The extra payout explains why Restoration Hardware trades currently a few cents above the $4.50 merger consideration.
The Restoration Hardware settlement is atypical in that the payment has been agreed well before the merger has closed. Shareholders approved the $179 million acquisition by private equity firm Catterton Partners only last week, and the settlement of the litigation was announced a day before the shareholder meeting. For the most part settlements are struck years after the deals have closed.
http://seekingalpha.com/article/81804-restoration-hardware-class-action-payout-still-leaves-shareholders-short
