San Diego, CA -- (ReleaseWire) -- 05/23/2012 -- An investor in NYSEAMEX:DRJ shares filed a lawsuit in effort to block the proposed takeover of Dreams, Inc. at $3.40 per share.
Investors who purchased shares of Dreams, Inc. (NYSEAMEX:DRJ) prior to April 16, 2012 and currently hold any of those NYSEAMEX:DRJ shares have certain options and should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 - 1554.
The plaintiff alleges that the defendants breached their fiduciary duties owed to NYSEAMEX:DRJ investors arising out of the attempt to sell Dreams, Inc. too cheaply via an unfair process to Fanatics, Inc.
On April 16, 2012, Dreams, Inc. (NYSE Amex: DRJ) announced that it has signed a definitive merger agreement with Fanatics, Inc. Under the terms of the agreement Fanatics, Inc will acquire all the outstanding shares of Dreams, Inc for $3.45 per share in cash for an aggregate transaction value of approximately $183 million, taking into account $25 million of outstanding debt. Dreams, Inc said the $3.45offer represents a premium of 32.0% over Dreams’ closing share price of $2.61 on April 13, 2012, the last trading day prior to this announcement.
However, the plaintiff alleges that the $3.45offer is unfair to NYSEAMEX:DRJ stockholders and undervalues Dreams, Inc. In fact, at least one analyst has set the high target price for AMEX: DRJ shares at $5 per share, well above the current $3.4offer.
Additionally, the plaintiff claims that the offer is unfair given the company’s growth potential. Indeed, Dreams’ financial performance increased over the past recent years. Dreams, Inc. reported that its annual Revenue rose from $81.44million in 2008 to $141.50million in 2011 and its Net Loss of $1.61million in 2008 turned into a Net Income of $1.23million in 2011.
Furthermore, the plaintiff claims that the takeover process is unfair to stockholders. Indeed, Dreams President and CEO Ross Tannenbaum, Chairman Sam Battistone and other shareholders who collectively own approximately 35% of the outstanding shares of Dreams have each already entered into voting and support agreements by which they have committed to vote in favor of the proposed merger transaction. Additionall the proposed takeover also includes several deal protection devices, such as a $5.5million termination fee and a no solicitation provision, which unduly bind the board to the proposed merger and make it entirely unlikely that the board members will fulfill their fiduciary duties to shareholders in the future, so the complaint.
Those who are current investors in Dreams, Inc. (NYSEAMEX:DRJ) and purchased their Dreams, Inc. (NYSEAMEX:DRJ) shares prior to the announcement, have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
3111 Camino Del Rio North - Suite 423
92108 San Diego