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    Spartan Stores Shareholder Group Balks at Latest Management Moves

    GRAND RAPIDS, Mich. -- Chiding what it called Spartan Stores' "apathetic" management and board for abandoning its search for a buyer or other way to increase shareholder value, a shareholder group in a letter filed yesterday set forth demands that included the launch a fixed-price tender offer for 20 percent of its shares at $13.50 each.

    GRAND RAPIDS, Mich. -- Chiding what it called Spartan Stores' "apathetic" management and board for abandoning its search for a buyer or other way to increase shareholder value, a shareholder group in a letter filed yesterday set forth demands that included the launch a fixed-price tender offer for 20 percent of its shares at $13.50 each.

    The group, which includes Loeb Partners Corp., which owns 1.32 million shares, or a 6.44 percent stake in Spartan Stores, also called for Spartan to establish a regular quarterly dividend to "reward us with access to our cash flows." Spartna disclosed the contents of the letter in an SEC filing.

    In the letter, Loeb Partners said, "We are not satisfied with the practice of publicly ending an investigation of strategic alternatives before you tell owners that the company has commenced such a process. This approach is all too safe and cozy. This approach is perfect for an apathetic management team and board that seek to be sheltered from reasonable shareholder expectations. How could this board possibly end such a process in a genuine fashion without at least concluding that a dividend must be instituted or a self-tender effected?"

    "Your investigation of ways to 'enhance,' not maximize value is not over," the letter continued. "It can't be over until you use your free cash flow as a tool to create immediate value. It can't be over until you have presented your shareholders with the best offers for the company. Please tell your owners what the results of your sale process were. There should be nothing to hide from owners. Owners should have the right to decide if a given offer for the company is acceptable. A shroud of secrecy is not acceptable."

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