The problematic merger of Hampshire Group Ltd. and NAF Holdings II is off, and the blame game is on.
NAF, the investment fund headed by Efrem Gerszberg that was seeking to buy Hampshire for about $30.4 million, said Monday it had ended its previously announced cash tender offer because certain conditions weren’t satisfied before the offer’s expiration at midnight on Friday. But Hampshire contended the termination was a by-product of insufficient financing on NAF’s part.
Hampshire said NAF’s letter “alleges that the basis for such attempted termination is that the company has breached its obligations under the merger agreement. We believe the allegations are, in fact, without basis. We believe that your attempt to terminate the merger agreement has occurred because [NAF and its affiliate, NAF Acquisition Corp.] do not have the financing in place necessary to consummate the tender offer and the merger on the terms agreed.”
The sweater and sportswear firm said all conditions of the tender were satisfied as more than 93 percent of the shares outstanding had been received and Hampshire had the required minimum of $37 million in cash available to proceed. It called NAF in breach of both its obligation to close on the tender offer and its representation to Hampshire a week ago that it had the required financing in place.
Hampshire said it was ending the merger agreement, and reserved its rights against NAF and its affiliate, as well as Gerszberg, president of NAF, under his personal guarantee.
Gerszberg could not be reached for comment.
NAF was to have merged into Hampshire upon completion of the deal with the combined entity going private.
Gerszberg initiated the takeover in February with an offer of $5.55 a share for common stock, which put the minimum purchase price at $30.4 million based on about 5.5 million shares outstanding. The offer to shareholders represented a roughly 200 percent premium on the stock at the time.
The April 17 deadline to close the acquisition was extended by a week after NAF found itself with two-thirds of the shares outstanding, below the 82 percent required. At the same time, the cash requirement for Hampshire was reduced to $37 million from $38 million.
Earlier this month, Hampshire said it had violated a financial covenant on a $125 million revolving credit facility with HSBC, disclosed a $29.9 million loss for fiscal 2008 and revealed its independent auditors had doubts about its future as a going concern. It also shed 75 jobs, about 24 percent of its global workforce, and implemented other budget cuts in an effort to realize $6.6 million in annualized savings.
Reacting to the news, investors sent Hampshire’s stock down $2.65, or 48.6 percent, to $2.80.
In addition to private label work for Macy’s, Nordstrom and Bloomingdale’s, Hampshire licenses the Joseph Abboud, Geoffrey Beene and Dockers brands.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast