NEW YORK — Private equity firm Apax Partners was said on Thursday to be in late-stage discussions to complete a deal to buy Tommy Hilfiger Corp., triggering a 2.2 percent drop in the stock and possibly a lower purchase price.
Banking sources familiar with the negotiations stated the financial firm is said to be willing to pay at least $16.50 a share, which, at 92.5 million outstanding shares, would mean a deal worth about $1.52 billion for the Hong Kong-based apparel retailer and manufacturer.
Hilfiger's role was unclear should the company be acquired. He is paid $14 million to $18 million a year.
Tommy executives declined comment. Apax representatives could not be reached.
The stock closed Thursday at $16 on the New York Stock Exchange, down 36 cents from the previous close and with more than 1.4 million shares traded. That compares with average trading volume of 517,992 shares. Tommy Hilfiger's market capitalization is $1.47 billion.
Bidders were looking at a price tag starting at $16 a share and were not expected to pay more than $17. Investors and some bankers last week thought the total purchase price might be about $1.68 billion. Tommy's market capitalization last week was $1.64 billion based on the stock's closing price of $17.75 on Dec. 13.
Shares of Tommy Hilfiger lost ground in the past week. A purchase price in the $1.52 billion range would still represent a slight premium over the company's market cap. The firm's prospects for its European and Asian businesses are considered excellent, but domestic wholesale sales are struggling even though U.S. retail operations are doing well.
Meanwhile, Phillips-Van Heusen, which had been a close partner to Apax in the bidding, is now said be taking a lower profile. PVH would have a licensing role in the deal, but not necessarily an equity stake as previously discussed. It wasn't immediately clear whether Fred Gehring, chief executive officer of Tommy Hilfiger Europe, still had a role in the bid that was submitted to Tommy Hilfiger's bankers at J.P. Morgan Chase & Co. late last week.
Gehring, working with Apax's London office, had submitted a bid for Tommy in June that was rejected. Tommy's bankers began contacting potential strategic buyers in the U.S. around July and August to gauge interest, as first reported on WWD's Web site on Aug. 17. WWD also was first to report on Nov. 10 that Apax was in the lead in the pursuit for Tommy Hilfiger. At the time it was working with Gehring and PVH, according to sources familiar with the negotiations.Should Apax and Tommy conclude a deal, Apax will own a stake in several high-profile apparel brands. Apax is the private equity firm that helped PVH acquire Calvin Klein, and also has invested in Spyder Active Sports. Its investment in PVH was $250 million.
Apax Partners' funds, with offices in New York and London, have raised about $20 billion around the world.
For the fiscal year ended March 31, Tommy Hilfiger's net income dropped 34.5 percent to $85.7 million, or 93 cents a share, from $130.8 million, or $1.43, a year ago. Total revenue fell to $1.78 billion from $1.87 billion in 2004.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews