Law firm sues over Tween buyout

Columbus, Ohio A New York law firm is soliciting shareholders to join a class-action lawsuit against Tween Brands Inc. over Dress Barn Inc.’s planned acquisition of the apparel retailer.

According to a late Tuesday report in Business First of Columbus, Levi & Korsinsky LLP said it filed a suit Tuesday in Delaware Chancery Court, alleging Tween’s stock-swap deal with Suffern, N.Y.-based Dress Barn Inc. values the New Albany-Ohio based merchant lower than its book value and analysts’ stock price targets.

Based on terms of the $220 million transaction, Dress Barn is paying about $157 million for Tween shares and paying off the troubled retailer’s outstanding bank debt, according to the report.

The deal for Tween is slated to close in October, provided it gets regulatory and shareholder approvals.

The law firm, which specializes in securities and shareholder litigation, said other terms of the deal, including a break-up fee of more than $5 million, “all but ensure that no superior offer will ever be forthcoming.”

The article had no comment from Tween.