Kellwood agrees to $762-million Sun Capital offer
30 January 2008
Mumbai: Apparel company Kellwood Co has agreed to a $762 million buyout offer by private equity firm Sun Capital Securities Group and said it will remove all roadblocks to a deal.
Kellwood said Sun Capital's $21-per share offer will be completed by 12 February if a majority of the shares are tendered. In addition, the St. Louis company would terminate a $60 million bond offering, which Sun Capital opposed.
Kellwood said it would give approval under Delaware law and take action under its shareholder rights plan, so that shareholders can decide if it's a good deal. Kellwood's board is not taking a position on whether shareholders should tender shares, the company said.
Earlier this month, Sun Capital said it started the tender offer to buy all outstanding shares of Kellwood, owner of clothing brand Baby Phat.
Sun Capital said the $762 million offer, including assumed debt, represents a 38 per cent premium to Kellwood's closing price on 18 September 2007, the last trading day before Sun Capital disclosed an unsolicited takeover bid for Kellwood.
Sun Capital owns roughly 10 per cent of Kellwood, which sells clothing under labels that include Calvin Klein, Hanna Andersson, Liz Claiborne, Phat Farm, Sag Harbor and Sierra Designs.