Shares at publicly listed Books-A-Million jumped by more than 20% on Monday, after the family that controls it put forward a non-binding proposal to take the book retailer private.
The Anderson family, which already has a 53% stake in the business, offered $3.05 (€2.30) per share in cash for Books-A-Million – up 20% on Friday’s closing price.
In a statement released on 30 April, the company said the buyout would see Books-A-Million, which is the US’s second largest traditional book retailer, merge with a newly formed acquisition vehicle controlled by the Andersons.
The deal would be financed through borrowings available under the family business's existing credit line.
Clyde Anderson, the founder’s grandson and the company’s executive chairman, described the offer as a “highly attractive opportunity” for the retailer’s public shareholders.
According to the company, Anderson has called for the board of directors to “establish a special committee of independent directors with its own legal and financial advisors to review the proposal on behalf of the company's public shareholders”.
The family will not go ahead with the proposed transaction unless the special committee recommends it, the statement also said.
However, law firm Glancy Binkow & Goldberg has since released a statement saying it is investigating potential breaches of fiduciary duty by the board.
“This investigation concerns the board of directors’ process for consideration of the proposed acquisition, and whether Books is acting in its shareholders’ best interests,” said the law firm.
Books-A-Million has seen “substantial recent growth”, with share prices rising from $2.20 on December 12, 2011 to $3.53 on March 14, 2012, Glancy Binkow & Goldberg said.
The business, which was founded by the first Clyde Anderson in Alabama in 1917, reported a 3.6% fall to $468.5 million in net sales from continuing operations for fiscal 2011. However, net sales were up 10.7% during the fourth quarter.