SOURCE: The Shareholders Foundation, Inc.

The Shareholders Foundation, Inc.

November 29, 2010 09:37 ET

Shareholders Foundation Announces J. Crew Group, Inc. Investor Lawsuit Against Buyout

SAN DIEGO, CA--(Marketwire - November 29, 2010) - The Shareholders Foundation, Inc. announces that an investor in J.Crew Group, Inc. shares filed a lawsuit in State Court against J.Crew officers and directors, including Chief Executive Officer Millard Drexler, alleging breaches of fiduciary duties arising out of their attempt to sell J.Crew too cheaply via an unfair and self-serving process.

Those who are current investors in J.Crew Group, Inc. and purchased JCG shares prior to Nov. 23, 2010, should contact the Shareholders Foundation by e-mail at mail@shareholdersfoundation.com or call +1 (858) 779-1554.

Last Tuesday J.Crew Group, Inc. announced that it has entered into an agreement to be acquired for approximately $3.0 billion by funds affiliated with TPG Capital and Leonard Green & Partners, under which J.Crew investors will receive $43.50 per JCG share in cash. J.Crew said the offer represents a 29% premium to J.Crew's average closing share price over the last month.

But the plaintiff alleges that the offer is if any a mere 15.5% premium and materially undervalues the company. Supporting the plaintiffs allegation is that JCG shares traded as recently as June over $44.50, and in April as high as $50, and that the open market sent JCG shares in response to the announcement already above the offer to over $44 per share.

Further, the plaintiff claims that certain defendants stand on both sides of the transaction. The plaintiff alleges that when it came time to sell J.Crew its CEO Drexler, who joined J.Crew in 2003, at which time it was private and TPG Capital owned a majority, returned to his former employers. Additionally Drexler is with about 3.45 million shares, or 5.4 percent of J.Crew the largest individual shareholder and stands to profit about $150 million in the takeover or about 15 times his original investment.

The Shareholders Foundation, Inc. is an investor advocacy group which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

Contact Information

  • CONTACT:
    Shareholders Foundation, Inc.
    Trevor Allen
    +1 (858) 779-1554
    mail@shareholdersfoundation.com
    3111 Camino Del Rio North
    Suite 423
    San Diego, CA 92108