Aria Partners has sent a letter to the board of Christopher & Banks Corp., this time in response to the retailer’s adoption last week of a poison pill.

This story first appeared in the July 12, 2012 issue of WWD. Subscribe Today.

Edward Latessa, partner at hedge fund Aria, on Wednesday disclosed that he sent the letter to Paul Snyder, the nonexecutive chairman of Christopher & Banks.

Latessa, who said his firm is “simply trying to protect shareholders from the company’s current board of directors,” told Snyder in the letter that Aria is not the hostile opportunist that the poison-pill strategy is typically designed to protect shareholders from. Rather, the opportunists are board members of the retailer, whom Latessa said have “received more than 100 percent of the company’s earnings in director fees.”

Using an analogy concerning the “farcical plot of ‘The Producers’ [in a] scheme to get rich by overselling interests in a Broadway flop,” Latessa went on to question the retailer’s contention that a turnaround is under way and that its current strategy is better than Aria’s offer to acquire the firm at $1.75 a share.

Latessa stated that the “board’s credibility when it comes to setting strategy is worthless based on its record so far….”

The Aria partner concluded: “Here are the facts: Christopher & Banks is not financially stable. Its financial condition is deteriorating rapidly. We believe you need to act and urge you to put this company up for sale. You’ve engaged credible bankers and lawyers. Put them to work running a sale process and let the market decide who should manage and own this company. This is what we and the rest of your shareholders demand.”

Aria on July 3 publicly disclosed its unsolicited $64 million offer in May for the retailer. That first bid was rejected by the retailer’s board on May 21, which prompted Aria earlier this month to make public a second offer for the company. The retailer’s board rejected the second offer as well, because the “proposal [was] not in the best interests of Christopher & Banks and its stockholders.” In support of management’s efforts to stabilize the business, the board also implemented a stockholder rights plan, also known as a poison pill, to make it more difficult for a potential acquirer to gain control of the company.

As for the latest Aria letter, a spokesman for the retailer said, “The board believes that the new management team’s plan will yield improved sales, margins and cash flow going forward. Therefore, the interests of all stockholders are best served through the continued focus on the current strategy.”

The nonbinding $1.75 per share offer from Aria that’s currently on the table represents a 20.7 percent premium to the closing price of Christopher & Banks shares on Wednesday. Shares of the retailer closed at $1.45, up 4.3 percent, in trading on the New York Stock Exchange.

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