St. John Shareholder Sues Over Buyout Offer
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One of St. John Knits Inc.’s largest outside shareholders has filed a lawsuit contending a bid by the founding Gray family to buy the company is too low.
The legal challenge was filed Tuesday in Orange County Superior Court by the San Francisco-based Parnassus Fund, which owns 325,000 shares, or 2%, of the stock in the upscale women’s clothing company.
It is the latest in a string of lawsuits that have been filed against Irvine-based St. John since December when Chief Executive Robert E. Gray announced that his family and Vestar Capital Partners intend to buy the shares the Grays don’t already own and take St. John private. Generally, the lawsuits claim that the $522-million purchase price does not represent the company’s true value.
But attorneys for St. John and the Grays maintained Wednesday that the purchase price is fair. The lawsuit “is the same old nonsense, just a different plaintiff’s law firm,” said Brian Timmons, the Grays’ attorney.
Initially, the Grays offered $28 a share, or about $490 million to buy the company. They later bumped the offer to $30 a share. Independent board members approved the buyout earlier this month.
“The initial offer of $28 was too low; the $30 is too low,” said Jerome Dodson, Parnassus’ president. “We’re just saying it’s worth more.”
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