NEW YORK — Tommy Hilfiger Corp. shareholders voted Tuesday to approve a $1.6 billion merger agreement with funds advised by Apax Partners.
The merger is expected to close today, subject to satisfaction of certain conditions. Under the terms of the agreement, each ordinary share of Hilfiger stock will be converted into the right to receive $16.80 in cash, without interest.
The two Apax funds, Elmira 2 B.V. and Elmira (BVI), are legal entities established by Apax. They were named after the upstate New York city in which Hilfiger was born and are used in Hilfiger’s marketing materials.
David F. Dyer, president and chief executive officer of Hilfiger, is expected to leave the business after the closing and will be succeeded by Fred Gehring, ceo of Tommy Hilfiger Europe. Tommy Hilfiger Corp.’s estimated sales volume is $1.7 billion.
Under Hilfiger’s renegotiated contract, the designer will receive a fixed salary of $14.5 million for the first four years, according to a Securities and Exchange Commission filing. This compares with a previous agreement with Tommy Hilfiger Corp. that provided a salary based on percentages of the company’s worldwide sales and licensing revenues. Hilfiger has also received an equity stake in the new company.
Among Apax Partners’ retail and consumer investments are Phillips-Van Heusen, Tommy Bahama, Spyder Active Sports, the Children’s Place and Charlotte Russe. In December 2002, Apax made a $250 million equity investment and provided a loan of $125 million to PVH in connection with the Calvin Klein acquisition. Apax owns 38 percent of PVH.