Centerplate Shareholder Files Complaint On Pending Acquisition
By Don Muret, Staff Writer, SportsBusiness Journal
A small shareholder in Centerplate has filed a complaint in Connecticut Superior Court against the sports concessionaire, alleging that the firm breached its fiduciary duty by accepting Kohlberg & Co.’s offer of $4 per income deposit security unit to acquire the company. Attorneys for Centerplate shareholder Warren Kaplan filed the complaint September 26, asking the court to consider expanding it to a class-action lawsuit on behalf of all owners of Centerplate common stock. The complaint asks for financial relief in excess of $15,000, according to the document. The complaint lists 11 defendants, including Janet Steinmayer, the firm’s CEO, its five-member BOD and Kohlberg & Co. Centerplate spokesperson Gael Doar said the company had no comment on the complaint. The complaint alleges in part that Centerplate’s board unanimously approved a deal for Kohlberg & Co. to buy the firm “without any meaningful search for a third party buyer for the company,” despite its intention to “maximize value for unit holders,” according to the document. An income deposit security combines common stock with a bond. Under the terms, Kohlberg merges with financially-strapped Centerplate through a debt tender of up to 70% of the bond portion of the IDS and the purchase of 100% of the firm’s outstanding stock. Kohlberg’s offer of $4 a unit includes $3.99 for each bond tendered and $0.01 a share for the common stock. The bond portion’s real value is $5.70 and pays 13.5% interest. The complaint includes Kohlberg & Co., whose properties include Bauer Hockey and Central Parking, because it alleges the firm was aware that Centerplate principals had not sought to obtain the best available transaction for the company’s public shareholders.
NATIONAL CITY: In related news, National City, the bank financing the Kohlberg-Centerplate merger, is in acquisition talks with PNC Financial Services Group and Bank of Nova Scotia, according to the Pittsburgh Business Times, a sister publication. It is not clear what effect a new owner of National City would have on the transaction, which Centerplate officials value at $185-200M. Centerplate had no comment, Doar said.
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