Acquisition Of True Religion Apparel, Inc. By TowerBrook Capital Partners L.P. May Not Be In The Best Interests Of True Religion Shareholders
SAN DIEGO and VERNON, Calif., May 13, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of True Religion Apparel, Inc. (NASDAQ: TRLG) by TowerBrook Capital Partners L.P., a New York and London-based investment management firm. On May 10, 2013, True Religion announced that it had entered into a definitive merger agreement whereby TowerBrook will acquire all of the outstanding shares of True Religion common stock for $32.00 per share in cash.
The Board of Directors' Actions May Prevent True Religion Shareholders from Receiving Maximum Value for Their Stock
Robbins Arroyo LLP's investigation focuses on whether the board of directors at True Religion is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger.The $32.00 merger consideration represents a premium of only 8.7% based on True Religion's closing price on May 9, 2013, the last trading day prior to the merger announcement. The 8.7% premium is substantially below the median premium of 35.62% for comparable transactions over the past three years. Further, the $32.00 offer price is considerably lower than the target price of $38.00 set by an analyst at B. Riley & Company on February 7, 2013. Is the Acquisition Best for True Religion and Its Shareholders? On May 10, 2013, True Religion released its fiscal year 2013 first quarter financial results reflecting an increase in total net sales. Specifically, the company's total net sales increased 13.1% to $120.8 million, compared to the same period in 2012. True Religion has exceeded analyst sales expectations the past three consecutive quarters. Further, the company reported a gross profit increase 6.9% to $73.7 million, driven in large part by overall sales growth. Given these facts, the firm is examining the board of directors' decision to sell True Religion now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.
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