Ademi LLP is investigating Hostess Brands, Inc. (NASDAQ: TWNK) for possible breaches of fiduciary duty and other violations of law in its transaction with J. M. Smucker.
In the transaction, Hostess stockholders are expected to receive only $34.25 per share, consisting of $30.00 of cash and .03002 of a share of J. M. Smucker's common stock (having a value of $4.25 based on the closing price of J. M. Smucker's common stock on Friday, September 8, 2023), representing a total enterprise value of approximately $5.6 billion, which includes approximately $900 million of net debt. The transaction agreement unreasonably limits competing transactions for Hostess by imposing a significant penalty if Hostess accepts a competing bid. Hostess insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Hostess’ board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.