NEW YORK — Mossimo Inc. founder Mossimo Giannulli on Tuesday withdrew his bid to acquire all outstanding shares of the company amid speculation in the financial community about another potential bidder.
Giannulli, chairman and co-chief executive officer, had planned to purchase the shares at $4 each. The designer said in documents filed with the Securities and Exchange Commission that he remains interested in acquiring the publicly held shares. However, the company said in a statement that he did not intend to increase his bid to current trading levels.
Shares of Mossimo climbed to a 52-week high in over-the-counter trading on Friday when it hit $6.20, but closed Tuesday at $4.90.
Giannulli, who owns about 65 percent of Mossimo, first made his offer on April 11. Some institutional investors, who spoke on condition of anonymity, said they have been concerned about why the evaluation of the deal by an internal special committee was taking so long. They also complained that the company still hadn't held its annual meeting.
There was speculation that Giannulli's offer was too low and that Mossimo was worth in the $7 to $8 per share range, sell side analysts and portfolio managers said. The higher share price expectation was based on sell-throughs of the company's Modern Amusement line, which it acquired last year, investors said.
The company said Thursday in a quarterly report filed with the SEC that the special committee was "in the process of reviewing the terms of Mr. Giannulli's proposal as well as any indications of interest expressed by other third parties."
The filing led to conjecture that there was at least one other bidder for Mossimo. The speculation appeared to be unabated on Tuesday after the latest regulatory filing regarding the withdrawal, which said, "Giannulli intends to review continuously the company's business affairs, capital needs and general industry and economic conditions, and, based on such review, Giannulli may, from time to time, determine to increase his ownership of common stock [or] approve an extraordinary corporate transaction with regard to the company ..."
Mossimo executives could not be reached for comment.
The use of the phrase "approve an extraordinary corporate transaction" led some investors to wonder whether Giannulli might actually sell the company, which would represent a turnaround from his position in April that he wouldn't agree to any other deal involving his stake in the company.During the intervening months, Mossimo has also been working on his Modern Amusement brand. The new line features men's apparel, with a women's line still on the drawing board, according to the Modern Amusement Web site.
Financial industry sources said the Modern Amusement line was doing well and has higher opening price points than the Mossimo brand.
Modern Amusement is sold mostly at specialty stores such as Fred Segal. At Macys.com, seersucker shorts have a list price of $72, while a striped polo shirt retails for $58.
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