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Dairy Mart Convenience Stores Inc. has terminated its agreement to merge with DM Acquisition Corp., a group of investors controlled by the chain's chairman, president and CEO Robert B. Stein Jr., prompting Stein's departure from the chain.
The original agreement, executed March 15, 2001, called for holders of Dairy Mart's common stock to receive $4.50 per share payable in cash. The deal apparently fell apart after some of Stein's finance sources indicated they would not continue to support the transaction. After "recent discussions" with Stein, a special committee of the board of directors "evaluated and unanimously recommend the termination of the proposed merger," according to a statement released by the 546-store chain.
The company in March said it would jettison 246 stores, or 40 percent of its portfolio, to get out of the red. Dairy Mart reported losses of $2.5 million last year.
"The board of directors agreed this was the best course of action and believes this termination will enable senior management and the board of directors to focus their efforts on managing Dairy Mart's near-term operating performance shortfalls," the statement said. "In addition, Dairy Mart will explore all financial and strategic alternatives as necessary to maximize value for all of its constituencies."
Gregory G. Landry, the company's vice chairman and CFO, was appointed president and chief executive officer. Landry joined the retailer in 1985, serving in various senior financial and operating positions. He is a member
of the board of directors, but was not associated with the DM Acquisitions Corp. He served in an advisory role to the special committee. Stein remains a director of Dairy Mart.
Stein and Landry were not immediately available for comment.