(Updates with McCormick comment in seventh paragraph.)
Nov. 28 (Bloomberg) -- McCormick & Schmick’s Seafood Restaurants Inc. was sued by a stockholder who contends the shares are undervalued in a $131.6 million takeover offer by Landry’s Inc.
Ray Zahnow said in the suit that McCormick directors are duty-bound to get the best price for the stock, and shirked their obligations in agreeing to the $8.75-per-share deal.
“The board has breached their fiduciary duties by agreeing to the proposed transaction for grossly inadequate consideration,” Zahnow said in a Delaware Chancery Court filing made public today in Wilmington, Delaware.
McCormick of Portland, Oregon, and Houston-based Landry’s announced the tender offer in a statement Nov. 22, saying the McCormick board determined the acquisition was fair and in the best interests of stockholders.
Landry’s said in a statement today it would offer $90 million in private-placement 11 5/8 percent senior secured notes due in 2015 to help finance the buyout.
In the lawsuit, Zahnow ask a judge to stop the transaction and award damages and legal fees.
The company “believes the claims asserted therein are meritless and intends to defend the lawsuit,” Joseph Sala, an outside spokesman for McCormick, said today in an e-mail.
Shares of McCormick rose 2 cents to $8.70 in Nasdaq Stock Market trading today in New York.
The case is Zahnow v. McCormick & Schmick’s, CA7067, Delaware Chancery Court (Wilmington).
--Editors: Mary Romano, Fred Strasser
To contact the reporters on this story: Phil Milford in Wilmington, Delaware, at firstname.lastname@example.org; Dawn McCarty in Wilmington, Delaware, at email@example.com.
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