Talbots Inc., the women’s clothing retailer trying to reverse falling sales, was sued by an investor contending a $369 million buyout bid by private-equity firm Sycamore Partners is too low.
Fred Schwartz alleges Talbots board members have a duty to get the best price and rejected a $3.05-a-share offer in May, according to papers filed yesterday in Delaware Chancery Court.
The Talbots board agreed to a reduced $2.75-a-share offer “out of desperation at the end of a failed negotiation with Sycamore, and without having conducted an adequate process to seek out higher bidders,” Schwartz’s attorneys said in the suit.
The Hingham-based retailer, established in 1947, has closed 90 locations since March 2011, and posted five consecutive years of sinking sales.
Julie Lorigan, a spokeswoman for Talbots, didn’t immediately respond to an e-mail seeking comment.
Talbots was unchanged at $2.39 at 1:14 p.m. in New York trading.