Apax rue21 purchase draws claims, investigation
New York – Law firm Harwood Feffer LLP is launching an investigation into claims against the board of directors of rue21 Inc. regarding the proposed purchase of the company by Apax Partners. On May 23, rue21 announced a definitive agreement for Apax to buy it, with stockholders receiving $42 in cash per share.
“Our investigation concerns whether the rue21 board of directors is fulfilling its fiduciary duties, maximizing the value of the company, disclosing all material benefits and costs, and obtaining full and fair consideration for company shareholders,” states a Harwood Feffer press release.
Neither rue21 nor Apax has yet officially responded to the investigation. Rue21 shareholders can contact Harwood Feffer for more information.
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Dollar General cuts profit forecast despite strong quarter
Goodlettsville, Tenn. — Dollar General reported record net income and sales during for the first quarter, but still reduced the top end of its profit forecast due to moderating same-store sales.
The discounter reported net income of $220 million, up 3% from $213 million in the first quarter of 2012. Net sales totaled $4.23 billion, up 8.5% from $3.9 billion.
Same-store sales increased 2.6%, with strong growth in consumables offsetting slower sales in seasonal and weather-sensitive products. Rick Dreiling, chairman and CEO of Dollar General, said continuing slow growth in non-consumable sales caused the company to scale back its profit forecasts.
“We are well positioned for our same-store sales growth to accelerate to 4-5% for the year as our key initiatives, such as the rollout of tobacco and Phase 5 planogram changes, continue to gain traction through the year,” said Dreiling. “Sales of non-consumables are expected to remain challenging, and we anticipate a continued shift to lower margin items within consumables and higher inventory shrink.”
For the 2013 fiscal year, Dollar General expects total sales to increase 10 to 11% from the 2012 fiscal year. Same-store sales are expected to increase 4 to 5%.
Scotts Miracle-Gro board members exit following bad language
Three Scotts Miracle-Gro board members resigned following the delivery of a unanimously supported reprimand of CEO Jim Hagedorn that stemmed from the use of inappropriate language.
Hagedorn apologized in a statement.
"While I have a tendency to use colorful language, I recognize my comments in this case were inappropriate and I apologize," Hagedorn said. "I, along with the rest of our board members, consider the matter resolved and I have made a personal commitment to prevent a future recurrence."
The three recent resignations came from Carl F. Kohrt, PhD, who recently accepted the position as president of his alma mater, Furman University in South Carolina; as well as John S. Shiely and William G. Jurgensen. The company says it will not fill the current vacancies.
The board will likely be reduced in size to eight to 10 members over time as part of the normal nominating and election process.
Scotts added that all three former board members confirmed that their departures were not related to any disagreement relating to the company’s operations, policies, practices or financial reporting.
"Each of these board members served us well for many years, and I want to thank them for their counsel and contributions," said Hagedorn. "I wish them each well in their future endeavors."
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