J. Alexander’s Holdings Inc. has rejected a $186 million buyout offer made earlier this week, stating the proposal by investor Ancora Advisors LLC is “is simply too unattractive to entertain.”
“The board takes its fiduciary duties to all shareholders seriously and strongly believes that it would not be a prudent or appropriate exercise of those duties to sell the company at a price that significantly undervalues the company at a time when the business is performing well — as you yourself have stated,” the board wrote in an April 11 letter.
The response comes only a few days after Ohio-based Ancora laid out a proposal to purchase the outstanding shares of the company’s common stock for $11.75 a share in a cash deal. Had it been approved, Nashville, Tenn.-based J. Alexander’s, the parent of 46 upscale dining concepts, would have gone private.
Ancora, which has an 8.6% stake in J. Alexander’s, could not be reached for immediate comment Friday.
In its offer letter, the company said taking J. Alexander’s private would be the “best path forward” for the brand, which operates 46 restaurants in 16 states including J. Alexander’s, Redlands Grill, Stoney River Steakhouse and Grill, Overland Park Grill and Lyndhurst Grill. The namesake J. Alexander’s restaurants have been around since 1991. Its menu features premium American classic dishes such as hand-cut steaks, prime rib and fresh seafood.
Ancora said it is “strongly opposed to the company attempting to justify its existence as a public entity through strategic acquisitions.”
Ancora was referring to J. Alexander’s move to buy 99 Restaurants LLC last year. Shareholders rejected the acquisition. In its letter to Ancora, the board defended that purchase attempt and called it a missed opportunity to boost shareholder value and diversify the company’s business.
Ancora’s buyout offer came amid a leadership transition at J. Alexander’s. Earlier this year, the company said it planned to promote its chief financial officer Mark Parkey to CEO and president, succeeding longtime executive Lonnie J. Stout II in the role.
The company said the promotion would become effective May 1. With the transition, Stout will become chair of the company’s board.
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