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[July 26, 2014]
Market Basket board considers purchase offer [The Eagle-Tribune, North Andover, Mass. :: ]
(Eagle-Tribune (North Andover, MA) Via Acquire Media NewsEdge) July 26--BOSTON -- The Demoulas Super Markets board of directors said it planned to entertain former CEO Arthur T. Demoulas' offer to buy up the rest of the family company and tried to bring restive employees back into the fold while reiterating its support for the two executives whose hiring last month ultimately sparked the week long Market Basket protest and boycott.
After an all-morning meeting Friday in Boston, the directors released a statement saying they had a duty to the company to consider all offers, but urged protesting employees to get back to work so "normal business operations" could resume immediately. The company in a separate statement later Friday promised to not change employee pay or benefits and said employees would not be penalized if they put down their signs and resume their jobs.
But at the same time, thousands of people rallied again in support of Demoulas in Tewksbury in a showing estimated to be double the size of Monday's rally. Organizers, several of them executives and managers fired last Sunday for inciting the uprising, urged employees and customers not to let up unless Demoulas is reinstated as CEO.
Attempts to contact several board members yesterday were unsuccessful. Neither Demoulas nor the co-CEOs were available for interviews.
"Consistent with its fiduciary obligations, the board will evaluate and seriously consider this proposal, along with any other offers previously received and to be received," the board said in a statement. "Following its evaluation of all of the offers, it will convey its recommendations to the company's shareholders." The board, led by Demoulas' rival and cousin Arthur S. Demoulas, was believed to have been preparing documents to shop the company around. Neither the board nor Arthur T. has confirmed any other recent offers or potential buyers, though the statement seemed to suggest other offers may be on the table.
But the board made clear that it will not rehire Arthur T. as CEO, a key demand of protesting employees who have shut down the company's three warehouses and led a boycott of the chain's stores, and reaffirmed its support for Felicia Thornton and James Gooch, the two executives hired after Arthur T.'s firing June 23.
Meanwhile, the board said, employees should get back to work and so the company can function.
"The negative behavior of certain current and former associates is at variance with the company's culture of putting the needs of the Market Basket customers first," it said. "It is now clear that it is in the interests of all members of the Market Basket community for normal business operations to resume immediately. Furthermore, the board reaffirmed its election of co-CEOs Felicia Thornton and James Gooch to manage the company in accordance with the company's bylaws." Friday night Demoulas Super Markets released a statement promising employees will not be punished if they come back to work and seeking to reassure employees afraid their benefits are in jeopardy.
"The past month has been trying. We appreciate the strain this change of leadership has placed on our associates," the statement said. "We welcome back associates who are committed to Market Basket's customers. There will be no penalty or discipline for any associate who joins in what will be a significant effort to return to the unparalleled level of performance and customer service that have been hallmarks of the Market Basket brand. There will be no change to Market Basket's unmatched compensation and benefits." Tom Trainor, a former grocery supervisor who was fired last Sunday for his role in organizing rallies, said the statements do not get them any closer to the goal of rehiring Arthur T. But he thought the fact the board will pass Arthur T.'s purchase offer to the rest of the shareholders could be encouraging.
"It would be great if that happened and ATD was able to buy the company," Trainor said. "But the rest of that statement, with the negative behavior, I think they have a bigger problem with customers returning to Market Basket. They support us and will shop somewhere else until ATD is brought back." While the rally in Tewksbury drew thousands of people, only a handful came to the Prudential Center in Boston for the board meeting, which started at 9 a.m., and they did not stay long.
Eleanor Corcoran, a Haverhill native who now lives in Somerville, William Caraballo and Chris Stetson, managers of the Chelsea Market Basket, met Arthur S. and other board members in the mall next to the Prudential Tower lobby to present at least a half dozen reusable grocery bags filled with petitions bearing nearly 100,000 signatures to reinstate Arthur T. as CEO.
Arthur S. and several of board members aligned with his side of the family did not respond or take the petitions, Corcoran said, but Arthur T. board members J. Terence Carleson and William J. Shea spoke briefly with the three of them and took one bag of petitions.
"(Shea) appreciates our being here," Caraballo said. "He doesn't want to go into this by himself." They left shortly after, bound for the rally in Tewksbury.
Even if Arthur S. and his side of the family accept an offer, making that deal happen is another matter altogether. Several years ago, Arthur S. and some of his family offered to sell their shares -- amounting to about 36 percent of all the shares, according to court documents -- to the company iteslf. That agreement spawned disagreements over pricing of the stock, and an arbitrator was brought in to salvage the deal. But it broke down, landed in Middlesex Superior Court and ultimately was decided by the Supreme Judicial Court last year.
No shares changed hands. However, the courts declared that shareholders do not have any obligation to first offer their shares to the company before selling to a third party.
Protesting employees have said they want Arthur T. in charge immediately even if a deal is struck because any sale likely will take time.
Follow Douglas Moser on Twitter @EagleEyeMoser. To comment on stories and see what others are saying, log on to eagletribune.com.
___ (c)2014 The Eagle-Tribune (North Andover, Mass.) Visit The Eagle-Tribune (North Andover, Mass.) at www.eagletribune.com Distributed by MCT Information Services
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