New York City Charlotte Russe Holdings Inc. shareholder B. Riley & Co. LLC said Tuesday that the retailer should not have spurned a takeover offer by KarpReilly Capital Partners LP and H.I.G. Capital LLC, according to the Associated Press.
Charlotte Russe in November opposed a nearly $200 million takeover offer by KarpReilly and H.I.G. Capital, saying it wanted to stick to its turnaround plan. The bid was valued at $188.1 million to $198.6 million, a premium of 31% to 38% over Charlotte Russe's closing stock price the day before the offer.
In a letter, B. Riley asked Charlotte Russe to explain why it decided to terminate negotiations with KarpReily.
"We are deeply troubled by the recent actions taken by directors and members of management," the letter said, "including the corporate governance missteps and the strategic and operational direction of the company."
B. Riley also raised concerns about appointments to Charlotte Russe's board, the conditions that caused CEO Mark Hoffman to retire, and a stockholder-rights plan.
Charlotte Russe said in August the plan was not adopted in response to any specific proposal and is not intended to prevent a takeover.
Also, B. Riley called recent management changes a "debacle," saying the board "seemingly forced" Hoffman's departure in July and believes new executives lack the experience needed for the junior apparel business.