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SHEBOYGAN, Wis. -- A group of Florida investors is pursuing discussions with Fresh Brands here, regarding the latter's planned sale to Certified Grocers Midwest Inc.
The investors, which own about 5 percent of Fresh Brands, are part of Freshgroup LLC. Last week, the group filed a statement with the U.S. Securities and Exchange Commission, indicating that they are considering either a lawsuit or proxy fight against Fresh Brands to halt the proposed $100 million sale to Certified Holdings Inc.
The sale price, valued at $7.05 a share, is $1.54 more than Fresh Brands' closing stock price the day before the sale was announced last Tuesday, according to a report in the Milwaukee Business Journal.
Hodgkins, Ill.-based Certified Grocers Midwest Inc., a 200-member grocery co-op, formed a separate holding company, Certified Holdings, to acquire Fresh Brands. The proposed merger is expected to close in the first quarter of 2006.
In the SEC filing, the investor group said it had begun buying Fresh Brands shares on Nov. 26, 2004, and continued to invest through Jan. 25, 2005. The group said it now owns 246,700 shares at $7.49 to $7.62 each.
The investors said in the filing that they sent a letter to management stating they were opposed to the proposed acquisition because, "among other reasons, the transaction is not in the best interests of the Company's shareholders." Fresh Group also said in the filing that it "intends to explore and possibly pursue legal remedies to protect its interests in the company and to seek further dialogue with the company regarding this transaction."
Fresh Brands, Inc., which operates corporate-owned and franchised retail supermarkets under the Piggly Wiggly and Dick's Supermarkets brands, currently has 74 franchised supermarkets, 20 corporate-owned supermarkets and two corporate-owned convenience stores, all of which are served by two distribution centers and a centralized bakery/deli production facility. Supermarkets are located through Wisconsin, northern Illinois and Iowa.