NEW YORK — Bernard Chaus Inc. said Tuesday night it has reached a definitive merger agreement with an affiliate of Vince Camuto, whereby Camuto will acquire the shares of Chaus not owned by members of the Chaus family for 21 cents a share in cash.

This story first appeared in the April 4, 2012 issue of WWD. Subscribe Today.

Chaus has also reached a settlement in connection with certain shareholder claims and objections to the transaction. The 21 cents a share represents an 88 percent premium over the average of the bid and asking prices for the company’s common stock for the last 10 trading days. Camuto proposed to acquire Chaus for 13 cents a share on Sept. 16.

Starting with his existing stake of 3 million shares, Camuto would need to acquire about 14 million shares to get to a 49 percent holding, which, at a price of 21 cents a share, would cost him about $2.9 million.

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“We are extremely pleased that an agreement has been reached by the company, Vince Camuto and shareholders who had been objecting to the price originally proposed for the transaction,” said Josephine Chaus, chairman of Chaus, which generated $85 million in revenues last year. “We believe that our company will be strengthened and will be better positioned to serve our retail partners and consumers under private ownership,” she added. “We have forged a close working relationship with Vince Camuto as a licensee and look forward to that partnership growing even closer in the future.”

Camuto, chairman and chief executive officer of The Camuto Group, added, “We are pleased that we were able to secure a definitive agreement which we believe will be beneficial to both companies. We look forward to working closely with the Chaus team to leverage the strengths of our two great companies for our retail customers and consumers.”

A special committee of independent directors of Chaus unanimously recommended to the Chaus board that the merger agreement be approved, and the board OK’d the transaction Tuesday night. The agreement has to be approved by two-thirds of Chaus shareholders before becoming effective. The company said it plans to file with the Securities and Exchange Commission a proxy statement necessary for the shareholders’ meeting, at which time the approval will be sought. It plans to hold that meeting about 30 days after the effectiveness of the proxy statement. The Chaus family, Camuto and certain shareholders have agreed to vote in favor of the transaction. The merger deal allows the board to terminate the agreement in favor of a superior transaction if its fiduciary duty so requires.

The shareholder settlement is with Kenneth Braun, the plaintiff in a putative class action brought by him to challenge the original transaction, and with Barry Berkowitz, the owner of about 5 million shares of Chaus common stock. It provides for the litigation to be settled with prejudice and for Berkowitz to support the transaction, so long as it has the approval of the board. The memorandum of understanding is subject to court approval.

In November 2010, Chaus inked a deal to produce Vince Camuto sportswear and ready-to-wear for fall 2011, which helped replace volume that was lost when Chaus’ licensing deal to make Kenneth Cole sportswear ended in October 2010. In January, Camuto told WWD that his company was pleased with the launch of the rtw. “It’s more than positive. It really helped the Chaus business. It’s in over 600 doors, but we’re not looking to blow it out,” said Camuto, preferring instead to have controlled growth. He said he plans to roll out more classifications. “We’ll do more leathers, jackets and pants, and sweaters will become a full line,” he said.

For the second quarter ended Dec. 31, Chaus had a net loss of $2.98 million on revenues of $15.7 million. Besides Vince Camuto, its brands include Josephine Chaus, Chaus, Chaus Sport and Cynthia Steffe.

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