Clothing seller and designer Tommy Hilfiger on Friday said it had accepted a $1.6 billion (€1.35 billion) cash takeover bid from private equity firm Apax.
The deal values Tommy Hilfiger at about $16.80 per share, a premium of 5 per cent based on Thursday's closing stock price.
The shares hardly budged yesterday morning, indicating investors believe a counter-bid is unlikely and that they are somewhat disappointed in the size of Apax's bid.
Analysts and investors had thought early in the auction process that the company could fetch more than $20 a share.
Hong Kong-based Tommy Hilfiger put itself on the auction block earlier this year after struggling for months with weakness in its US wholesale business.
Clothing vendor Phillips-Van Heusen yesterday said it was in preliminary talks with Apax on how they could collaborate on the Tommy Hilfiger purchase.
Apax owns all of Philips-Van Heusen's Series B stock, which is convertible into 23 per cent of the company's shares.
Philips-Van Heusen has been exploring a Tommy Hilfiger licensing agreement with Apax, according to a source involved with the deal.
Tommy Hilfiger's namesake and founder has agreed with Apax to enter into a new employment agreement in which he will continue as principal designer as well as chairman of the Strategy and Design Board. Fred Gehring, chief executive of Tommy Hilfiger Europe, will take over as chief executive, replacing David Dyer, who will leave.
The sale is expected to close in the spring and is subject to shareholder approval, Tommy Hilfiger shares were up 1 cent at $15.99 in the late afternoon on the New York Stock Exchange.
The stock has climbed 49 per cent this year, compared with a 6.5 per cent gain for the Dow Jones Clothing and Accessories Index. - (Reuters)
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