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Privet Fund LP Delivers Letter To Independent Directors Of J. Alexander's Commenting On Alternative Proposals

Stocks in this article: JAX









ATLANTA, Aug. 29, 2012 /PRNewswire/ -- Privet Fund LP ("Privet"), member of The Committee to Strengthen J. Alexander's (the "Committee"), a group that collectively holds over 10% of the common stock of J. Alexander's Corporation ("J. Alexander's" or the "Company") (NASDAQ: JAX) announced today that it has delivered a letter to the independent members of the Company's Board of Directors.  In the letter, Privet voices its concerns about the process that culminated in the Board's recommendation that shareholders tender their shares to Fidelity National Financial at $13.00 per share.  Privet further outlines why it believes the current credible proposals by the undisclosed "Party F" and "Party G" now require the Board to re-open discussions with all parties in order to secure the highest price reasonably available for shareholders.

The full text of Privet's letter is shown below:

August 29, 2012

E. Townes Duncan Brenda B. Rector Joseph N. Steakley

J. Alexander's Corporation3401 West End Avenue, Suite 260 Nashville, Tennessee 37202

Dear Independent Directors of J. Alexander's Corporation,

Privet Fund Management LLC (together with its affiliates, "Privet" or "we") continues to hold voting and dispositive power over 600,956 shares of J. Alexander's Corp. ("J. Alexander's" or the "Company"), or roughly 10.02% of the common shares outstanding.  In light of the disclosures of the events that have transpired, both prior and subsequent to the restated merger agreement entered into with Fidelity National Financial ("Fidelity"), we believe the independent members of the Board are failing to maximize shareholder value in the face of significant opportunity.

While deeply disappointed in the Board's process, disclosure and ex-post rationale, we remain focused on ensuring shareholders receive fair consideration in exchange for parting with their company.  We remind you that, with a merger agreement signed and both a $14.00 and $14.25 per share proposal on the table from two credible parties capable of closing a transaction of this magnitude, the sale of the Company appears inevitable.  As a result, your duties under Revlon require you to secure the highest price reasonably available for shareholders irrespective of any other influences or motivations.  Although the time has passed to properly form an independent committee and conduct arms-length discussions (as the CEO has clearly been spearheading negotiations with all parties[1]), it is not too late to provide all parties a level playing field upon which to ultimately consummate a beneficial transaction.

With the recent disclosure that Party G's financing sources are willing to escrow funds upon the execution of a definitive merger agreement, there should be no concerns about this Party's ability to consummate a transaction.  Presumably Party G (as well as its financing sources) has also achieved a level of comfort with the post-close "solvency" of the combined company that was referenced as a potential issue in a past filing.  Further, now that Party F has submitted a new proposal, there are two very credible parties presenting shareholders with greater economic consideration than Fidelity is offering in its current tender[2].  Though we are quite satisfied that two additional parties are cognizant enough of the value and potential of the Company's assets to continue to advance acquisition proposals, we remain rightfully skeptical of the "accidental auction" that continues to unfold[3]. 

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