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Business Associations Keyed to Coffee, 9th Ed.
In re Toys “R” Us, Inc., Shareholder Litigation
Citation:
877 A.2d 975 (2005)Facts
In January 2004, Toys “R” Us announced a strategic review process when its stock was trading at $12.00 per share. The company had three divisions: Global Toys (the largest division), Babies “R” Us (a growing, profitable division), and Toys Japan (a minority-owned division). The board, consisting of nine independent directors and CEO John Eyler, initially focused on selling the Global Toys division while retaining Babies “R” Us. The board retained Credit Suisse First Boston (First Boston) as its financial advisor and received thorough valuation analyses of the company’s divisions.
After extensive market canvassing, the company received attractive bids for Global Toys from financial buyers including KKR, Cerberus, Apollo, and a Bain/Vornado group. In March 2005, Cerberus expressed interest in buying the entire company for $25.25 per share. The board then invited all final bidders to submit bids for the whole company. The KKR Group (a consortium of KKR and Bain/Vornado) offered $26.75 per share, exceeding Cerberus’s bid by $1.50 per share.
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