Some Winn-Dixie shareholders filed suit Thursday over the price being paid for the company’s stock in a sale to another grocery store chain.
News broke Monday that the Jacksonville-based grocery chain would be sold to Bi-Lo, a chain based in Greenville, S.C. The $560 million deal calls for shareholders to receive $9.50 per share.
Jacksonville attorney Charles Jimerson, representing the shareholders, said that’s not enough.
“The shares traded as high as $10.08 as recently as July,” Jimerson said. “There’s a couple of book value reportings around the $15 range. At least one analyst had it at $11.
“We think $9.50 is substantially below what the company is worth.”
Calls to Winn-Dixie were not returned Thursday afternoon.
The company’s stock closed Thursday at $9.31, down 6 cents from Wednesday’s close.
Jimerson would not say how many shareholders he represents. The lawsuit, filed in Jacksonville, only lists Arthur I. Murphy Jr. “on behalf of himself and others similarly situated.”
Jimerson is filing it as a class-action suit.
Officials said Monday the sale would take 60 to 120 days to close. That would include a vote by Winn-Dixie shareholders.
Jimerson said he didn’t know what kind of delay the suit might have on the sale. A lawsuit like this typically involves a third-party valuation of the stock.
“The ongoing investigation and discovery will show,” he said, “that the company’s officials breached their fiduciary duty to the stockholders.”
Because Winn-Dixie executives didn’t shop the company around, he said, Bi-Lo is underpaying for the shares.
There were 56,227,000 outstanding shares as of Thursday.
Winn-Dixie has 480 stores in five Southeastern states.
All would stay open and remain Winn-Dixies, said company officials Monday.
Bi-Lo’s 207 stores would also keep their names.
Soon after news of the sale broke, law firms from across the U.S. announced that they were seeking Winn-Dixie stockholders who were unhappy with the price being offered.