Looks like the Perry Ellis International Inc. board will honor its agreement with George Feldenkreis to take the company private.
On the recommendation of its special committee, the Perry Ellis board last month decided to accept Feldenkreis’ offer to buy the company at $27.50 a share, a transactional value of $437 million.
On Monday, Randa Accessories jumped into the fray with a competing non-binding offer to acquire the company at $28 a share, or $444 million offer.
Investors applauded the competition and pushed shares of the company above both offers. The stock closed down 0.2 percent t $29.28.
But sources said Tuesday night that the board met earlier in the day to review Randa’s offer and concluded that it wasn’t sufficient to warrant a change in course.
As WWD first reported, there had been a men’s accessories firm that was kicking the tires when the special committee was reviewing Feldenkreis’ proposal.
WWD on Monday also noted that the Perry Ellis board’s responsibility to shareholders wasn’t just on price in regard to its analysis of Randa’s offer, but also what risks it might take on should there be a change in ownership.
Randa has a long history of experience in the licensing business, but its focus is primarily in accessories and not apparel. That meant that many brands that are inbound licensing clients of Perry Ellis – brands that the company does not directly own – might possibly have the right to end the existing licensing agreements. While it isn’t clear how Perry Ellis has its licensing agreements structured, the standard agreement typically has what is called a change in ownership provision giving the brands the right to opt out if they choose when the licensee changes ownership.
In the case of the deal with Feldenkreis, the risks are low. Feldenkreis was chairman of the company, and also was its founder. He left last fall when he was pushed out, and likely wouldn’t be making any major changes once he’s back as owner.
Neither Feldenkreis nor David Katz, Randa’s chief marketing officer, could be reached for comment.