A New York law firm is soliciting shareholders to join a class-action lawsuit against Tween Brands Inc. over Dress Barn Inc.'s planned acquisition of the Central Ohio apparel retailer.
Levi & Korsinsky LLP said Tuesday it filed a suit in Delaware Chancery Court, alleging Tween's stock-swap deal with Suffern, N.Y.-based Dress Barn Inc. values the New Albany-based merchant lower than its book value and analysts' stock price targets. Based on terms of the $220 million transaction, Dress Barn is paying about $157 million for Tween shares and paying off the troubled retailer's outstanding bank debt.
The deal for Tween is expected to close in October, provided it gets regulatory and shareholder approvals.
The law firm, which specializes in securities and shareholder litigation, said other terms of the deal, including a break-up fee of more than $5 million, “all but ensure that no superior offer will ever be forthcoming."
