Shares of Saks Inc. rose 4.2 percent to close at $12.49 in New York Stock Exchange trading Friday after Citigroup Inc. issued a research note indicating a takeover of the retailer is a "probability."
The Icelandic firm Baugur Group earlier last week rolled over its forward contracts from July 2007. The new contracts for Saks shares mature on July 30. Baugur doesn't currently own any Saks shares. The nine contracts give Baugur the right to acquire 12.2 million shares of common stock at forward prices ranging from approximately $12 to $23 per share.
According to Deborah Weinswig, retail analyst at Citigroup, "We view this news as an incremental positive for our investment thesis for Saks as it increases our confidence that there is a probability of a takeout deal in Saks' future."
Weinswig reiterated her "buy, high risk" rating for Saks shares, for which she has a $20-per-share target price.
According to the regulatory filing on Wednesday with the Securities and Exchange Commission, Baugur has paid $42.2 million for the forward contracts, and will pay an additional $194 million to purchase the 12.2 million shares of Saks stock under the contracts if they are settled at maturity.
The filing also repeated an earlier disclosure that Baugur has had exploratory discussions with Dubai-owned Landmark Group, a Saks shareholder, about the possibility of a joint bid for the retailer. The filing stated: "Baugur expects to hold additional discussions with Landmark."
Under the contracts, Baugur has the right to acquire 8.5 percent of Saks' stock and Landmark has beneficial ownership of 1.2 percent, or nearly 1.7 million shares. Together, they hold 9.7 percent of the retailer's common stock, should they elect to pursue a joint bid.
WWD reported Oct. 17 that Baugur was eyeing Saks and that executives from the Icelandic investment firm had met with the retailer's management. Baugur confirmed the report in an Oct. 29 SEC filing and said it might team up with Milestone Resources Group Ltd. for a joint bid. Milestone is an investment vehicle of Landmark.
Earlier this month, Iceland's Supreme Court in Reykjavik upheld a conviction against Jón Asgeir Jóhannesson, executive chairman of Baugur, for wrongdoing in bookkeeping. The court rejected charges that prosecutors had leveled against Jóhannesson, including fraud, embezzlement and misleading the market by wrong statements to the stock exchange.Forward contracts generally roll over automatically. A spokeswoman for Baugur would only say the company was obliged to update its regulatory filing because of the latest legal development.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)