NEW YORK — EB Acquisition Ltd. has called for Elder-Beerman Stores Corp.’s shareholders to press for the resignations of chief executive Byron “Bud” Bergren and chief financial officer Edward Tomechko if the bidding process for the department store chain isn’t opened up immediately.
In a letter to shareholders Thursday, EB Acquisition managing member Daniel Summers called for the move after learning that the exclusive bidders for the Dayton, Ohio-based company are Bergren, a board member, and Tomechko, a situation Summers wrote was “a blatant conflict of interest for management, the company, its shareholders and its employees.”
As reported, Elder-Beerman disclosed on May 16 that it had received an unsolicited offer from one party, but has never identified that party. Summers said in his letter that the prospective buyers include members of Elder-Beerman’s management, as reported in WWD, and named Bergren and Tomechko in his letter. According to sources, the management group has through early July to complete its negotiations and due diligence and arrange financing. Elder-Beerman’s board would then be required to entertain other offers.
EB Acquisition has made the only other offer so far. After first expressing its interest on May 20, the firm on June 4 offered to acquire all shares of common stock of Elder-Beerman at $5.50 a share, for a total of about $62.7 million and a 3.8 percent premium to its $5.30 share price at the time. To satisfy shareholders, management’s offer would have to be higher.
Summers said EB Acquisition was able to independently identify Bergren and Tomechko as the exclusive bidders after Bergren was named in a WWD report on June 13.