Largest At Home shareholder rejects revised purchase offer

The fight over a proposed sale of At Home Group Inc. to a private equity firm continues.

CAS Investment Partners LLC, the largest At Home shareholder with approximately 17% of the company’s common stock, has issued a formal letter to At Home’s stockholders urging them to reject a revised tender offer of $37 a share from private equity firm Hellman & Friedman LLC.

In May 2021, the fast-growing, value home-décor retailer initially agreed to be acquired by Hellman & Friedman for $36 per share in an all-cash transaction valued at $2.8 billion. Following an initial letter from CAS opposing that deal, At Home and Hellman & Friedman entered into an amended and restated merger agreement under which H&F will acquire all outstanding shares of At Home for $37.00 per share in cash.

Under the terms of the revised agreement, Hellman & Friedman will commence a tender offer to acquire all outstanding shares of At Home's common stock on or before June 23, 2021. Upon completion of the merger, At Home will become a private company and shares of At Home common stock will no longer be listed on any public market. The At Home board unanimously voted to recommend all stockholders accept the revised offer.

In the letter, CAS provides three primary conclusions as to why it opposes the new offer:

1.    At Home’s sales process has been flawed from the start and tainted by its chairman and CEO’s apparent incentives to reach a deal with H&F;
 
2.    The board’s special Committee seemingly wrote off the company’s past several quarters of tangible business improvements and material progress, and;
 
3.    The board’s special committee discounted the company’s significant future revenue and earnings potential, resulting in an overly pessimistic valuation.

“If H&F wants to acquire At Home, we believe it should pay a reasonable premium that appropriately reflects the company’s path to enhanced value and the present consumer environment,” states the letter. CAS has previously suggested an offer of $70 or more share would be reasonable. “It is disturbing that the Board’s Special Committee is trying to usher through a fire sale just as At Home is gaining considerable momentum and the pandemic’s economic overhang is subsiding. At Home, which can become the next great American retailer, has the ability to grow rapidly and produce tremendous value for stockholders in the public market.”