May 11 (Bloomberg) -- Books-A-Million Inc.’s directors were sued by an investor claiming the board wrongfully approved a $48.8 million buyout of the bookstore chain by its controlling shareholders.
Directors of Birmingham, Alabama-based Books-A-Million should be held liable for approving Chairman Clyde Anderson’s offer to pay $3.05 a share in cash to take the chain private, investor Jeffrey Ye said in a Delaware Chancery Court lawsuit. Anderson and his family already own about 53 percent of the company.
“The Anderson family is attempting to buy out the public stockholders at an unfair price, dramatically below the underlying real value of the company, in a transaction that is unfair,” Ye said in the suit, filed May 8 in Wilmington.
The offer comes after Books-A-Million officials started an expansion plan last year by taking over 14 stores formerly operated by the bankrupt Borders Group Inc. The stores are in Connecticut, Iowa, Maine, Maryland, Michigan, New Hampshire, New Jersey, Pennsylvania and Wisconsin.
Borders, once the second-largest U.S. bookseller, is liquidating in bankruptcy court after failing to find a buyer. Ann Arbor, Michigan-based Borders lost business as customers switched to e-readers such as Amazon.com Inc.’s Kindle, introduced in 2007. Barnes & Noble Inc. is the largest U.S. bookseller, with 1,341 stores.
Jane Hoerner, a Books-A-Million spokeswoman, didn’t immediately return a call for comment on the suit.
Books-A-Million officials said in a release this week that directors had set up a special two-member committee to evaluate the offer by Anderson and his family.
That committee includes J. Barry Mason, the former dean of the University of Alabama’s business school, and Albert C. Johnson, a retired accountant and the former head of finance at Dunn Investment Co. Both are current board members.
Ye said Anderson and his family dominate the board and will control the special committee.
“The independence of any purported Special Committee must be viewed with a great deal of skepticism,” Ye said in his complaint.
Ye filed a so-called derivative lawsuit, which would return any recovery from insurance covering Books-A-Million officers and directors to the company’s coffers.
Another Books-A-Million investor, Victor Collins, filed a separate suit against the company over the buyout today seeking damages. Collins is seeking class-action status for his lawsuit on behalf of other shareholders. Both lawsuits seek to block the buyout from proceeding.
Books-A-Million, which also runs stores under the names Books & Co., Bookland and Joe Muggs Newsstands, operates in the southeastern U.S.
The Ye case is Ye v. Anderson, 7504; the Collins case is Victor Collins v. Clyde B. Anderson, 7518, Delaware Chancery Court (Wilmington).
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