Select Comfort's Shares Gain After Deal Rejection

MILWAUKEE (AP) — Shares of bed maker Select Comfort Corp. soared on Friday after the company's shareholders narrowly rejected an investment from Sterling Partners that would have bought a controlling stake of the company.

Shares rose 47 cents, or 16.6 percent, to $3.30 in midday trading Friday, after earlier setting a 52-week high of $3.65.

The company said in a filing with the Securities and Exchange Commission that its shareholders rejected the sale of 50 million shares for 70 cents each at a special meeting Thursday.

The $35 million transaction was approved by 49.94 percent of shares represented at the meeting, just under the amount needed for approval.

Raymond James analyst Budd Bugatch told clients in a note that doesn't mean the deal is over.

"Given the narrow margin of victory, we would not be surprised if there was a recount or if the results were contested in some way," he said.

Earlier this month, Minneapolis-based Select Comfort opposed additional investment from the Clinton Group Inc., which had been looking for changes at the maker of Sleep Number beds, namely that it cut expenses, close stores and oust the CEO.