Another obstacle has presented itself in Apollo Global’s $1.36 billion acquisition of retail chain The Fresh Market. This latest stumble comes in the form of a lawsuit against Apollo Global by stockholders of The Fresh Market, in claims that the recent purchase “undervalues” the chain.
In a Delaware federal court last week, several of The Fresh Market stockholders sued Apollo Global in allegations that Fresh Market Founder and Chairman, Ray Berry, spoke to Apollo privately without the company’s board.
“The flawed sale process was tainted from the outset due to defendant Ray Berry’s and his son Brett Berry’s prior back channeling with Apollo,” the complaint explained, according to Law360. “Berry and his family, who collectively own approximately 9.8 percent of the outstanding common stock of the company, were able to initiate the current proposed transaction in private conversations with Apollo, unknown to the rest of the company board or management, well before the sale process had even begun.”
According to source Law360, the stockholders claim that the company’s shareholder, J.P. Morgan Securities LLC, has a previous bias favoring the asset manager, having done more than $116 million of business with Apollo Global in the past two years.
The Fresh Market initially accepted Apollo Global’s $1.36 billion offer in mid-March. The offer translated to about $28.50 per stockholder share.
According to Law360, The Fresh Market’s stock price on March 11 represented a 24 percent premium. For the closing price on February 10, the day before the details were released to the press, the offer represented a 53 percent purchase.
The first complaint resulting from the deal was broached last month in an investigation into the grocer’s Board of Directors, as to whether or not a fair sales process was conducted.
This lawsuit, the latest progression in objections to the sale, seeks to stop the proposed deal from being closed between the companies. The lawsuit states that the deal should cease movement unless each the involved parties “disclose material information about the deal.”
At the time of this publication, neither The Fresh Market or Apollo Global had commented on the lawsuit.
DeliMarketNews will continue to give you the latest news as they are released on this proposed deal.
