California Pizza Kitchen, Inc. Buyout under Investor Investigation

May 25, 2011 - PRLog -- The Shareholders Foundation announces that the announcement by California Pizza Kitchen, Inc. that it agreed to a takeover of California Pizza Kitchen by an affiliate of Golden Gate Capital prompted an investigation on behalf of investors of California Pizza Kitchen, Inc.  concerning whether the proposed acquisition is unfair to CPKI stockholders and whether certain directors and officers breached their fiduciary duties.

If you purchased shares of California Pizza Kitchen, Inc.  and currently continue to hold those NASDAQ-CPKI shares, and/or if you have any information relating the investigation, you have certain options and you should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

The investigations lead by law firms concerns whether certain directors and officers at California Pizza Kitchen, Inc. or others breached their fiduciary duties in connection the proposed takeover.

On Wednesday, May 25, 2011 California Pizza Kitchen, Inc. (NASDAQ CPKI) and Golden Gate Capital announced that they have entered into an agreement under which an affiliate of Golden Gate Capital will acquire California Pizza Kitchen, Inc for $18.50 per share in cash, or approximately $470 million.
Following the announcement shares of California Pizza Kitchen, Inc.  jumped from $16.83 on Tuesday to $18.50 on Wednesday.

California Pizza Kitchen said the purchase price represents a 32% premium to the 30-day average price prior to the Company's Board of Directors authorizing management to begin exploring strategic and financial alternatives on February 23, 2010, and a 15% premium to the 30-day average price prior to the announcement of the transaction. The transaction is currently expected to close in the third quarter of this year.

However, shares of California Pizza Kitchen, Inc. (Public, NASDAQ-CPKI) traded as recently as February 15, 2011, thus well before the boards announcement to explore strategic and financial alternatives as high as $17.85 per share, leaving CPKI stockholder with only a meager premium. During 2010 CPKI shares reached as high as $21.22 per share asking certain CPKI investors to hand over their shares at a discount. Further at least one analyst has set a target price of $24.00 per share for California Pizza Kitchen stock.

Additionally another investment group reportedly quickly stepped in to say it wanted to talk about the possibility of a leveraged buyout of California Pizza Kitchen "at or above" $19.50 a share.  In a filing with the U.S. Securities and Exchange Commission (“SEC”) the Clinton Group investment firm said it believed "there may be other alternatives to maximize shareholder value," including the possibility of a $19.50-a-share or higher leveraged recapitalization of California Pizza Kitchen.

Therefore the investigations monitor the proposed transaction and concern whether the California Pizza Kitchen Board of Directors undertook an adequate and fair sales process to obtain fair and maximized consideration for all shareholders of California Pizza Kitchen, Inc.  and in particular breached their fiduciary duties to California Pizza Kitchen (CPKI) shareholder by failing to adequately shop the Company before entering into the transaction.

California Pizza Kitchen, Inc  said that Co-CEOs Rick Rosenfield and Larry Flax, COO/CFO Susan Collyns and Chief Communications Officer Sarah Goldsmith-Grover of California Pizza Kitchen, who together with their affiliates own in the aggregate approximately 11% of the Company's outstanding shares (assuming vesting and net exercise of all of the options held by them), have already entered into agreements pursuant to which they will tender their shares into the offer and, if applicable, vote in favor of the merger.

The investigation concerns also whether the affiliate of Golden Gate Capital would underpay for NASDAQ-CPKI shares, thus unlawfully harming CPKI stockholders.

California Pizza Kitchen performed well over the past years. California Pizza Kitchen, Inc. reported over the past four 52/53 week filing periods relatively consistent Total Revenue ranging from $632.88million to $677.07million.

A potential securities class action lawsuit would seek to maximize the amount of money and information NASDAQ CPKI shareholders would receive in a buyout, so the law firm.

Those who purchased shares of California Pizza Kitchen, Inc. (Public, NASDAQ-CPKI) and currently continue to hold those NASDAQ-CPKI shares, and/or those who have any information relating the investigation, have certain options and should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

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The Shareholders Foundation, Inc. is a professional portfolio monitoring service and an investor advocacy group. We do research related to shareholder issues and inform investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. At Shareholders Foundation, Inc. we are in contact with a large number of shareholders. We believe that together we can combine the interests of many investors, and use the size of our interest as leverage against the giant corporations. We offer help, support, and assistance for every shareholder. We help investors find answers to their questions and equitable solutions to their problems. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.