This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Acquisition Of Harris Teeter Supermarkets, Inc. By The Kroger Co. May Not Be In The Best Interests Of Harris Teeter Shareholders

SAN DIEGO & MATTHEWS, N.C., July 9, 2013 /PRNewswire/ --   Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of Harris Teeter Supermarkets, Inc. (NYSE: HTSI) ("Harris Teeter") by The Kroger Co. (NYSE: KR) ("Kroger").  On July 9, 2013, the two companies announced a definitive merger agreement in which Kroger will acquire all of the outstanding shares of Harris Teeter common stock for $49.38 per share in cash.

(Logo:  http://photos.prnewswire.com/prnh/20130103/MM36754LOGO )

Is the Acquisition Best for Harris Teeter and Its Shareholders?

Robbins Arroyo LLP's investigation focuses on whether the board of directors at Harris Teeter is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in the merger, or whether they are seeking to benefit themselves.  The $49.38 merger consideration represents a premium of only 1.78% based on Harris Teeter's closing price on July 8, 2013, the last trading day prior to the merger announcement.  The 1.78% premium is substantially below the average premium of 31.34% for comparable transactions in the past three years.  In addition, Harris Teeter's board adopted an Executive Officer Incentive Bonus Plan, making each of the company's executive officers eligible for an incentive bonus equal to 35% of their current base salary upon the closing of the merger.

On May 2, 2013, Harris Teeter released financial results for the second quarter of its fiscal year 2013.  For the quarter ended April 2, 2013, the company reported sales of $1.7 billion for which the company reported a gross profit of $359.6 million, or 30.76% of sales.  Further, Harris Teeter reported a 7.3% increase in operating profit to $56.3 million compared to $52.5 million in the same period of 2012.  In response to these results, Harris Teeter's Chief Executive Officer and Chairman of the Board, Thomas W. Dickson, commented, "We are very pleased with our results for the second quarter …. we continue to realize increased number of active households and customer visits year-over-year.  Our pricing and promotional strategies were effective in driving unit sales and increasing market share while increasing quarterly gross margin by 10 basis points over the prior year."

Given these facts, the Firm is examining Harris Teeter's board of directors' decision to be acquired by Kroger now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.   

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs