At Home’s biggest shareholder said it will vote against an offer to buy the Plano-based home décor retailer for $36 a share, saying it “deprives stockholders of anything resembling a fair premium.”
New York-based CAS Investment Partners, which owns about 17% of At Home shares, wrote a letter to the At Home board on Sunday saying it planned to vote against the proposed plan by private equity firm Hellman & Friedman to take At Home private, which “grossly undervalues the company and lacks a meaningful premium.”
At Home said May 6 that it had entered into a definitive agreement to be acquired by Hellman & Friedman in an all-cash transaction valued at $2.8 billion, including the assumption of debt.
The retailer was able to ramp up its e-commerce, which it had just started when the pandemic started. It capitalized on the trend of consumers sprucing up their homes during the stay-at-home economy and posted a 41.3% increase in total sales and a 30.8% increase in comparable sales. It ended 2020 with record fourth-quarter profit of $72.7 million — its best year since it went public in 2016.
CEO Lee Bird has said that the momentum continued into this year and reaffirmed the expectations that the company is on a path to expand from its 226 stores in 40 states to a chain of 600 stores.
At Home shareholders are being asked to vote on the transaction at the company’s annual meeting on June 16. At Home declined to comment on Monday about the CAS letter.
Under terms of the agreement, At Home can solicit other offers during a 40-day “go-shop” period, and H&F has the right to match any bigger offer. Otherwise, the sale is expected to close in the third quarter.
In its letter to the At Home Board, CAS Investments listed all the advances the company has made during the pandemic and its future prospects to support its view that $36 a share is too cheap.
“While it looks like a great deal for H&F, it represents a slap in the face to stockholders,” said the letter, which was signed by CAS founder and portfolio manager Clifford Sosin. “If necessary, we are also prepared to take steps to prevent a sale to H&F under the present terms.”
Twitter: @MariaHalkias
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