Nov 26: Levi & Korsinsky investigates Teavana Board of Directors

[Jackie]

Nov 26 just in; Law firm Levi & Korsinsky are investigating Teavana’s board of directors for “possible breaches of fiduciary duty and other violations of state law in connection with the sale of the Company to Starbucks Corporation.” The way I read this, in simplified terms it means that the board is being examined for agreeing to an artificially low price per share and failing to shop around more for better offers. Teavana shares were trading higher  back in May, so the $15 per share agreement was not a good deal for Teavana stockholders. Looks like “at least one analyst had set a price target of $24.)

Levi & Korsinskyby the way  is a national law firm in New York city which, according to their website “represents the  rights  of  shareholders  and victims of  corporate abuse.”

Heavy stuff. If you own shares you can join the action.

Any thoughts on this? What’s your take?

[peter]

Interesting, but I don’t think that the lawyers are on to anything spectacular, but there is a little bit of a twist here. Teavana’s stock price has been in a general fall since the company went public and the shareholders were losing out anyhow. At no point have I ever seen a buy recommendation for Teavana. This may just be a typical legal move that happens whenever a merger takes place.

Teavana’s stock performance tanked this year and has never been higher than it was at the IPO – that doesn’t speak well for the company, but sets it up ripe for a takeover – which is exactly what happened. It appears to be a generally viable company with a large customer base and nice stores in good locations. The stock price tanked and went into the dirt and Starbucks moved in to take it over. That’s what happens.

But from May 2012 to November 2012, the price has been hovering around $11-$14 and hasn’t experienced any of the motion or movement it was seeing beforehand and I suppose that is what is making the shareholders and the lawyers skeptical – though it seemed to stabilize at around that point – it think it appears that they are suggesting that its not a natural market… Additionally, with the share price that low, Starbucks is certainly not going to be the only possible buyer, if Mack & Co. were looking for buyers to save the company which overextended itself during the expansion, did they shop it around enough and create buying competition for the company or just roll over and invite Schultz & Co. out to tea?

[Xavier]

Or perhaps Starbucks heard the rumours and came to see them with a good project?

And then they agreed on a given day and the stock price went a little above it (if you hear rumours about that, you are going to buy, aren’t you? And the price will rise).

 

And @Peter might be right as they are already publishing a press release for another merger.

It seemed pretty standardized to me.

I am always surprised when I see how the American system is so full of lawyers.

[Author]

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