Select Comfort Holders Reject Sterling Deal

MINNEAPOLIS (AP) — Shareholders of Select Comfort Corp., creator of the Sleep Number bed, have rejected a proposal that would have given control of the company to the investment firm Sterling Partners.

Sterling had proposed buying 50 million shares for 70 cents each, a deal worth $35 million. Shareholders rejected the deal in a vote that took place Aug. 27.

The difference in votes on the sale had been so narrow that Select Comfort did a recount. It found a second time that shareholders had rejected the proposal.

Minneapolis-based Sterling on Friday asked a Delaware court for another recount, this one to be done by an independent party. The court denied the request, but Select Comfort did agree to give Sterling its tabulation materials from the vote.

Shareholder Patrick Hopf also sued the company. Hopf was expected to be appointed as the company's new CEO by board members that Sterling would have appointed. Hopf said Select Comfort breached its duty by failing to conduct a recount and vote audit using a neutral third party.

Select Comfort shares rose 8 cents to $3.13.