The buy-out saga at Elder-Beerman Stores continues to get more interesting after it was revealed last week that the CEO and CFO of the company were identified as the “Exclusive Bidders” in the acquisition talks reported by EBSC on May 16. Elder-Beerman said at the time that it was in takeover talks, and while it received more than one offer for the company, it decided to go forward with only one unnamed party.
The issue was raised after a local developer created EB Acquisition, Ltd. for the purpose of pursuing the purchase of the Elder-Beerman. EB Acquisition made an all-cash offer to the Elder-Beerman board for $5.50 per share of the EBSC common stock. EB Acquisition has said the board has never responded to their offer and would not let them perform due diligence.
In a letter sent to the EBSC Board of Directors last week, EB Acquisition maintained the actions of CEO Byron Bergren and CFO Edward Tomechko are a “blatant conflict of interest for management, the Company, its shareholders and its employees”.
In referencing the Q1 2003 financial report that showed a 7.7% decrease in same-store sales, EB Acquisition intimated that “Management’s focus may not be on running the Company — but on acquiring the Company. This begs the question of what company resources were used by the “Exclusive Bidders” pursuing personal gains on the Company’s dime.”
EB Acquisition is seeks the resignation of the two officers of the company and that the company develop an open bidding process.
