We are investigating the fairness of the $30.00 per share in cash at which Franchise Group, Inc. (Nasdaq: FRG) (“FRG”) has agreed to be sold to a senior management team at FRG and a consortium of financial partners.
If you remain an FRG shareholder and question the fairness of the price, you may contact our firm to discuss your legal rights at no charge by completing and submitting the form below.
Why is there an investigation?
On May 10, 2023, FRG announced that it had agreed to be sold for $30.00 per share in cash to a senior management team at FRG (led by Brian Kahn, FRG’s CEO) (“Management Group”) and consortium of financial partners that includes B. Riley Financial, Inc. and Irradiant Partners. The Management Group presently owns approximately 36% of FRG’s outstanding common shares.
The agreement has been approved by the FRG board of directors (“Board”) upon the recommendation of a special committee (“Special Committee”) of purportedly independent and disinterested directors.
“We are investigating whether FRG’s Board acted in the best interests of FRG shareholders in approving the sale,” explained Joshua Fruchter, a founding partner at Wohl & Fruchter. “This includes whether the members of the Special Committee that recommended the transaction were truly disinterested and independent of the Management Group, whether the acquisition price adequately compensates FRG shareholders, and whether all material information regarding the transaction has been fully disclosed.”
In particular, the Chairman of the Special Committee that recommended the deal, Matt Avril, is currently a member of the strategic advisory board of Vintage Capital Management, of which Brian Kahn is the managing partner and founder.
Further, on March 20, 2023, FRG announced that it had received an unsolicited non-binding proposal to acquire all of its outstanding shares of common stock for a price of $30.00 per share in cash. Based on the deal price of $30.00 per share in cash announced today, the Special Committee did not negotiate any increase in the initial offer price.
Finally, according to an analysis of Wall Street price targets for FRG in the last 90 days published on Seeking Alpha, there is a high price target for FRG of $42.00 per share, and an average price target of $36.80, which indicates that several Wall Street analysts would deem the deal price far too low.