J. Crew’s Surprise Vote in Favor (JCG)

J. Crew Group Inc. (NYSE: JCG) is perhaps one of the more strange mergers out there involving retail and private equity.

TPG Capital and Leonard Green & Partners offered $43.50 to acquire the company and again take J. Crew private.  To say that ‘conflicts of interest’ allegations have flown here would be an understatement. While not a management buyout from Chairman and & CEO Mickey Drexler, he is expected to remain here and will have a post-merger stake.

CNBC’s David Faber has reported and others are starting to report that the merger was approved by shareholders though the deal has not closed yet because of the pending court cases.

Shares of J. Crew are now up over 1% at $43.56, so the hope is that the private equity buyers will sweeten the bid further to get the hurdles overcome and to close the deal sooner.  The problem with premiums over the buyout price is that when a deal is done it often gets done only at the original terms.  It is not as if Green and TPG pose any antitrust issues here.

JON C. OGG