Books-A-Million Takes Offer of $3.25 a Share to Go Private

book store
Source: Thinkstock
Bookseller Books-A-Million Inc. (NASDAQ: BAMM) has signed a definitive agreement with a newly organized entity owned by the company’s controlling Anderson family. The new Anderson-owned entity will acquire the outstanding shares of stock it does not already own for $3.25 per share in cash. The deal is valued at about $21 million. Clyde B. Anderson is executive chairman of Books-A-Million.

The company’s board of directors formed a special committee in January 2015 after the Anderson family offered to buy the company for $2.75 a share in cash. According to a Schedule 13D/a filed on Monday, the Anderson family and several other reporting entities own about 58% of Books-A-Million shares, unchanged from the filing made in January.

The acquisition of the bookstore chain is sure to spawn at least a handful of lawsuits alleging that the sales price is too low. The only other 5% owner is Dimensional Fund Advisors, which owns about 856,000 shares.

Clyde Anderson said:

We believe the transaction is a positive result for everyone, most importantly the Company’s shareholders. The Special Committee and its advisors have done a thorough job to assure that all terms and conditions are arms’ length, and we are pleased to have come to a fair and balanced agreement.

The transaction will be financed through a combination of the contributions of the company’s shares owned by the Anderson Family and any management rollover participants and borrowings of approximately $21 million under the company’s existing credit facilities.

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Completion of the transaction is subject to certain closing conditions, including obtaining shareholder approval and other customary conditions. In addition, the closing of the merger is subject to a condition that the holders of a majority of all outstanding shares not held by the Anderson Family or by any director or executive officer of the company approve the merger.

Shares traded up more than 20% in the early afternoon Tuesday, at $3.17 in a 52-week range of $1.39 to $3.39. Only an average of around 13,000 shares a day change hands, and the highest price Tuesday was about $3.22 per share.