A putative class action filed by a shareholder of Atlanta-based Teavana seeks to derail the planned purchase of the company by Starbucks, claiming that proposed $620 million price “substantially undervalues” the national chain of tea stores and is “merely an attempt by Starbucks to acquire Teavana for a bargain during a temporary downturn in the economy.”

Seattle-based Starbucks announced last month that it intended to acquire Teavana Holdings Inc., which sells loose tea and tea-related merchandise in 301 stores and through its website.

According to the complaint filed in Fulton County Superior Court by Robbins Geller Rudman & Dowd partners John Herman and Ryan Walsh, Teavana shareholders are to receive $15.50 in cash for each share of Teavana stock they own.

The suit, filed Nov. 19 by Teavana shareholder Peter Rosenblum, asks the court to approve it as a class action and enjoin the sale which, it says, will “deprive Class members of their fair share of Teavana’s valuable assets and businesses to the irreparable harm to the Class.”

The suit says that Teavana shares traded as high as $15.45 after the deal was announced while Starbucks stock fell 2 percent, “which confirms the market recognizes the Proposed Transaction is undervalued.”

The suit names Teavana Holdings, company founder and CEO Andrew Mack and several corporate directors, and Starbucks as defendants, and alleges breach of fiduciary duties against the individual defendants and aiding and abetting of that breach by Teavana and Starbucks.

Unless the court intervenes, it says, the deal is almost certain to proceed since Mack and three other shareholders who collectively control 74 percent of the stock have already approved a written merger agreement.

“Thus,” it says, “no shareholder vote or any additional shareholder action is required in order to complete the transaction.”
Teavana shares closed at $15.40 per share on Wednesday.

Herman was not available to discuss the suit, and media contacts for Teavana and Starbucks did not immediately respond to requests for comment.

Contributor: Greg Land in Fulton courts, Litigation | subscribe to rss |   share