Goody's Family Clothing, Inc. announced that it has received a competing acquisition proposal from a third party. One of the parties that had previously submitted a proposal to acquire Goody's during the exclusivity period with Sun Capital Partners IV, LP, has reaffirmed its interest in acquiring Goody's by submitting a revised acquisition proposal with a bid of $8.50 per share, subject to due diligence, with the possibility of a higher price upon completion of due diligence. The proposal takes into account Goody's obligations to pay a termination fee and expenses under the Agreement and Plan of Merger among Goody's and certain affiliates of Sun Capital Partners IV, LP, dated October 7, 2005. The Goody's Board of Directors has determined that this new offer would reasonably be expected to lead to a superior proposal (within the meaning given to such term in the Agreement and Plan of Merger). Therefore, as permitted under that agreement, Goody's will commence a discussion and due diligence period of up to 10 business days with the competing acquiror in order to enable the Board of Directors of Goody's to determine whether the offer is a superior proposal.
Goody's disclosed earlier this week that it had entered into the Agreement and Plan of Merger with certain affiliates of Sun Capital at a cash price of $8.00 per share. The company had previously received two acquisition proposals, one of which had been received during the exclusive negotiating period with Sun Capital and the other had been received a few hours after the execution of the Agreement and Plan of Merger, but before the merger agreement was publicly available.
Goody's also announced that two complaints have been filed in connection with its previously announced Agreement and Plan of Merger with certain affiliates of Sun Capital Partners, IV. The complaints, which name both Goody's and its directors (and in one case, certain executive officers) as defendants, were brought in Tennessee state court and are seeking, among other things, certification as a class action, a determination that fiduciary duties were breached, injunctive relief against the proposed transaction and unspecified damages. Together, the complaints allege that the defendants breached their fiduciary duties by accepting an inadequate offer, by failing to address other acquisition proposals, by taking steps to discourage other acquisition proposals, including an excessive termination fee, and generally failing to maximize shareholder value. No interim injunctive relief is being sought.
The Company believes the complaints are without merit.
