Investors say buyouts shortchange shareholders

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In May, the Aramark buyout team raised its offer to $33.80 a share, a 20 percent premium over its closing price on April 28, 2006, the day before the original offer was announced.

Neubauer did not participate in the board's deliberations about the deal, according to company filings. A vote on the buyout is scheduled at a Dec. 20 meeting in Philadelphia. An Aramark spokeswoman did not return a message requesting comment.

If the buyout goes through it will be the second time the company has been taken private. Aramark first went private in 1984; Neubauer was the company's president and CEO at the time. He was chairman and CEO when the company again went public in December 2001, and that year the company lent him $8.49 million to buy Aramark stock, according to its 2001 proxy. Such loans are no longer legal.

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Under the terms of the current deal, Neubauer would convert his 8.5 million Aramark shares, valued at $250 million, into an ownership stake in the company once it goes private.

"By virtue of this investment, unlike our other stockholders, Mr. Neubauer will have an opportunity to share in any growth of Aramark following the merger," the company said in its proxy.

Neubauer will also have a $1 million salary, which the board would be able to increase, but not decrease, under the terms of the deal.

At least five shareholder suits have been filed against Aramark, alleging its directors breached their fiduciary duty to stockholders.

Neubauer could have cast 10 votes for each of his shares, but has said he will cast just one per share, reducing his voting power from 23 percent to less than 5 percent. The other members of the management committee are doing the same.

The investors at Eminence already voted with their feet, selling 10.4 million shares in the company during the most recent quarter, which was most of its position in Aramark, according to LionShares.com, a data provider.

At Four Seasons, the offer price of $82 a share represents a 28.4 percent premium over the closing price the day before the deal was announced.

Under an agreement Sharp made with the company in 1989, if the company were to be sold, he would receive a payment based on the sale price, plus another payment if the price per share was 25 percent higher than the weighted average trading price for the preceding six months. The announced deal is a 33.1 percent premium over the past six months' trading.

That's how his $288 million, one-time payment was calculated. Under the deal, Sharp and his family would also retain a 10 percent ownership stake after the company goes private, with remaining shares split between private equity companies owned by Microsoft founder Bill Gates and Prince Alwaleed Bin Talal Alsaud of Saudi Arabia.

On a conference call the day the deal was announced, Sharp took no questions. A spokeswoman for Four Seasons declined to comment.

"This transaction is intended to ensure the legacy of the Four Seasons," Sharp said on the call. "This proposal achieves all my objectives for Four Seasons and my family, and is the only one that I am prepared to pursue."

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