A major shareholder of American Greetings, investment fund TowerView LLC, has announced that it intends to vote against the $878 million privatisation deal led by the publishing giant’s controlling Weiss family.
The news comes just a few weeks after the Weiss family announced that it would pay between $18.20 and $18.35 per share in cash to all other Class A and Class B shareholders, plus one regular quarterly dividend of $0.15 per share, to secure full ownership of the business.
The Weiss family has 51 per cent voting power in the firm founded by Jacob Sapirstein over 100 years ago in Cleveland, Ohio. The company went public in 1958. Their privatisation bid looked like a done deal until TowerView, which holds 6.2 per cent of the Class A stock outstanding, formally resisted the move last week, saying: “shareholders would do better if the contemplated transaction was not consummated.”
A letter from TowerView spokesperson Daniel R. Tisch filed with the SEC in April said: “We believe that there is no reason at this point to permit the Weiss Family to take the company private… Over the years the Weiss Family has been permitted to achieve voting control of the company through repurchase of common stock along with a program where the stock options granted to the Weiss Family has been exercisable into Class B stock. We believe that this has been and continues to be to the detriment of public shareholders”.
TowerView has asked Peter J. Solomon Co. to withdraw its fairness opinion and wants the two special committee members to change their recommendation of the proposed deal.
Shares in AG have climbed around 14 per cent in the past three months.
