An investigation on behalf of investors of Alberto-Culver Company (NYSE:ACV) over potential breach of fiduciary duties by the ACV board of directors were announced.
Alberto-Culver Company, located in Melrose Park, Illinois, develops, manufactures, distributes and markets beauty care products, as well as food and household products in the United States and approximately 100 other countries.
On Monday, September 27, 2010, Alberto Culver Company (NYSE: ACV) announced that it has entered into an agreement in which Unilever PLC will acquire all of the outstanding shares of Alberto Culver for $37.50 per share in cash, valuing the company at approximately $3.7 billion.
According to Alberto-Culver Company its board of directors approved the merger agreement and the $37.50 per share price represents a 33 percent premium to Alberto Culver's 12-month volume weighted average share price and an 18 percent premium to its all-time high closing share price achieved earlier this year.
Shares of Alberto-Culver Company (NYSE: ACV) traded before the announcement at $31.66 per share and increased in response to the takeover news by over 18% to $37.64 per share thus above the current offer. The investigations by law firms take this market reaction and question the offer on behalf of current ACV investors. Specifically the investigations concern whether the Alberto-Culver Board of Directors breached their fiduciary duties to Alberto-Culver Company (NYSE:ACV) stockholders by failing to undertake an adequate and fair sales process, in particular adequately shop Alberto-Culver Company before entering into the transaction, and whether the proposed transaction undervalues Alberto-Culver Company (NYSE:ACV) shares and by how much this proposed transaction undervalues the Company to the detriment of ACV shareholders.
Alberto-Culvers 12 months revenue increased from $1.186billion reported on September 30, 2006 to $1.43398billion reported on September 30, 2009. Its Income after Tax for the same time periods almost doubled. While Alberto-Culver Company was able to report $65.84million Income after tax, it was able to report $117.83million in 2009. Additionally, in the third quarter, Alberto-Culver reported net sales of $417.6 million, an increase of 18.8%, compared to $351.6 million in the same quarter for the prior year. Further, Alberto Culver reported earnings per share of $0.39, $0.02 higher than analyst estimates of $0.37.