NEW YORK — Mossimo Inc. and Mossimo Giannulli said on Wednesday that Giannulli would begin his tender offer next week to take it private as a third party’s competing offer fell through.
The competing bid came from Iconix Brand Group Inc., which submitted a bid for $7 a share last week. It was the second time the brand marketer expressed interest in Mossimo. According to a source familiar with the bidding, Iconix submitted a letter over the summer to the Mossimo board indicating its interest in acquiring the company, but failed to garner a response from Mossimo.
Sources familiar with the negotiations said in the latest negotiating round, talks suddenly hit a wall as the deal was about to be signed. According to the sources, the designer and founder began pushing for a higher price per share from Iconix. One of those sources described Giannulli as playing “hardball.”
Bankers and legal professionals for both firms either could not be reached for comment or declined to comment, and executives at the companies did not return phone calls.
Mossimo Giannulli, chairman and co-chief executive officer, has tried twice to acquire the outstanding shares of the company he founded. He owns about 65 percent of Mossimo and made his first bid on April 11, hoping to acquire the balance at $4 a share. He withdrew the offer in August. A month later, he made a new offer, this time upping the bid to $5 a share.
Last month, following disclosure of the third-party offer (the $7-per-share bid from Iconix), Mossimo Inc. and Mossimo Giannulli said in a statement that Giannulli had concluded, after reviewing the third-party proposal, that “it was unlikely to lead to a transaction that he would be willing to accept.”
The latest development represented a conundrum in the Mossimo sale saga for institutional and hedge fund investors. The company still hasn’t had its annual shareholder meeting, even though one should have been held in July. The bidding scenario has the majority owner seeking to acquire the outstanding shares at the lowest price possible, while at the same time pushing for a higher price for his stake in the firm.
Some portfolio managers who own shares of Mossimo said this week that the shares could be worth in the $7.50 range, and a few believe that the two sides will get the deal done eventually.