Harris Teeter shareholders have filed a lawsuit against US retail giant Kroger in a bid to block the purchase of the regional grocery chain.
Kroger struck a deal earlier this month to buy Harris Teeter for US$2.44bn. The move, which came five months after Harris Teeter hired JP Morgan to help explore sale options, will see Kroger purchase all outstanding shares for $49.38 per share in cash.
The price represents a premium of 33.7% to the Harris Teeter closing share price on 18 January, the day of the first media report it was evaluating strategic alternatives.
Shareholders of Harris Teeter, however, filed a lawsuit in Mecklenburg County earlier this week claiming it failed to get a high enough premium to its closing price.
New York-based shareholder rights law firm Levi & Korsinsky, said in the filing: “The investigation concerns whether the Harris Teeter Board of Directors breached their fiduciary duties to stockholders by failing to adequately shop the Company before agreeing to enter into the transaction, and whether The Kroger Co. is underpaying for Harris Teeter, thus unlawfully harming Harris Teeter shareholders.”
The attorneys are asking for the transaction to be blocked or to award shareholders damages.
Kroger did not return a request for comment at the time of going to press.