San Diego, CA -- (SBWIRE) -- 02/27/2012 -- The Shareholders Foundation announces that an investor in NYSE:AEA filed a lawsuit in State Court against members of the board of directors of Advance America, Cash Advance Centers in effort to block the proposed takeover of Advance America, Cash Advance Centers by Grupo Elektra, S.A.B. de C.V. for $10.50 per NYSE:AEA share.
Investors who are current investors in Advance America, Cash Advance Centers (NYSE:AEA) and purchased NYSE:AEA shares prior to February 15, 2012, have certain options and you should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 - 1554.
On Wednesday, February 15, 2012, after the market closed Advance America, Cash Advance Centers, Inc. (“Advance America“) (NYSE: AEA) and Grupo Elektra, S.A.B. de C.V. (“Grupo Elektra”) (BMV: ELEKTRA) announced that Advance America and subsidiaries of Grupo Elektra have entered into an agreement under which Grupo Elektra will acquire control of all of the outstanding shares of Advance America, a leading U.S. short-term lender, for $10.50 per share in cash. The total transaction value is approximately $780 million, including the Company's outstanding debt as of December 31, 2011.
The plaintiff alleges that the $10.50offer undervalues Advance America, Cash Advance Centers. In fact, at least one analyst has set the high target price for NYSE:AEA stocks at $11, thus above the current offer. Furthermore, NYSE:AEA shares traded as recently as December 2011 at $9.33 per share, leaving some AEA stockholders with only a meager premium.
Additionally, the plaintiff says, "Advance America's financial performance has been strong in multiple areas, including an increasing stock price, solid financial position with reasonable debt levels, attractive valuation levels, expanding profit margins (with gross profit at 35.00%), growth in earnings per share (which improved by 31.8%), and robust earnings growth." Furthermore, so the lawsuit, defendants agreed to preclusive deal protection devices, such as a hefty termination fee provision ranging from $10 to 22million, that are unattractive to other potential buyers.
Those who are current investors in Advance America, Cash Advance Centers (NYSE:AEA) have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
3111 Camino Del Rio North - Suite 423
92108 San Diego