TurboChef sues over Elgin firm's buyout

TurboChef Technologies Inc., maker of fast-cooking commercial convection ovens, was sued by a shareholder who contends a buyout offer from rival Middleby Corp. undervalues the stock.

TurboChef, based in Atlanta, said Aug. 12 it would be bought by Middleby, of Elgin, for about $196 million, or $6.47 per share, in cash and stock, a 30 percent premium at the time.

"The proposed acquisition is the product of a flawed sales process and is being consummated at an unfair price," the Robert Gintel Revocable Trust said in a lawsuit filed Sept. 19 in Delaware Chancery Court in Wilmington.

TurboChef reported a $17.23 million net loss last year on revenue of $108.1 million. Middleby, maker of Toastmaster ovens, is buying TurboChef to add to its consumer and restaurant lines.

TurboChef investor relations spokesman James A. Cochran didn't immediately return a call seeking comment on the lawsuit.

TurboChef fell Jan. 31 after Starbucks Corp. Chief Executive Officer Howard Schultz said stores would eliminate warm breakfast sandwiches because the odor interfered with the coffee's aroma. Starbucks, which uses TurboChef ovens, later decided to keep selling the sandwiches after changing the recipes.

Middleby will pay 0.0486 of its share and $3.67 cash for each TurboChef share. The acquisition may close by year's end.

The case is Robert Gintel Revocable Trust v. James Price, CA4049, Delaware Chancery Court (Wilmington).