Tarrant Apparel Group's bid to acquire the Buffalo Group, maker of Buffalo Jeans, has ended.
Tarrant, based in Los Angeles, said this week that the two companies had "mutually agreed to terminate the purchase agreement," a cash and stock deal said to be valued as high as $120 million.
"Our mutual decision to terminate the agreement was not made lightly," Gerard Guez, interim chief executive officer of Tarrant, said in a statement. "While we are disappointed that we were unable to conclude the transaction, Tarrant and Buffalo believe that it is in the best interest of both parties to operate independently at this time."
Buffalo has returned $4.75 million of a $5 million deposit to Tarrant.
Tarrant announced its intent to acquire Buffalo, based in Montreal, in December, offering $40 million in cash, $15 million in promissory notes, 13 million shares of common stock, "earn-out" payments of as much as $12 million and a contingent payment if Tarrant stock failed to reach a minimum price in five years.
Tarrant was expected to focus on expanding Buffalo's retail operations, particularly in the U.S., where the brand is distributed exclusively in department stores. Gaby Bitton, president of Buffalo's business development, was to have been given a seat on Tarrant's board and become ceo of the Buffalo division. Gaby's four brothers — Charles, David, Gilbert and Michel — were to be given senior-level positions in the new company.
The deal's dissolution did nothing to help Tarrant's stock performance. Shares have fallen more than 30 percent since reaching $2.10 a share on April 3, closing at $1.46 a share in Nasdaq trading on Thursday.