The board of Perry Ellis International Inc. has authorized a special committee to evaluate George Feldenkreis’ proposal to buy the company.
Feldenkreis, former chairman of Perry Ellis, submitted the non-binding proposal on Feb. 6.
The company said the special committee is comprised of independent directors, including Joe Arriola, Jane DeFlorio, Bruce J. Klatsky, Michael W. Rayden and J. David Scheiner. Scheiner will serve as chair of the special committee.
Perry Ellis also said the committee has hired two law firms: Paul, Weiss, Rifkind, Wharton and Garrison; and Akerman, to serve as legal counsel. PJ Solomon was named financial advisor.
The company said there is no “assurance” that the proposal would result in a binding offer, that it would even be executed, or that any other transaction would be approved. Further, the company said it would not move forward with “any transaction unless it is approved by the special committee.”
The Feb. 6 buyout proposal has a transactional value of around $430 million, or $27.50 a share. Feldenkreis is working with Fortress Investment Group.
In Feldenkreis’ letter to the board detailing the terms of his proposed buyout, he said he remains the largest shareholder with an ownership stake of 11.3 percent. The letter was disclosed in a regulatory filing with the Securities and Exchange Commission.
The former chairman said the proposal includes an equity roll-over contribution of his stake, plus a capital commitment from a Fortress affiliate, Fortress Credit Advisors.
Feldenkreis also said he is not happy with the direction of the company.
“I am not comfortable with the motivations, strategy and oversight of the existing board and believe shareholder value will suffer under this board’s stewardship. As the largest single shareholder of [Perry Ellis], I am not prepared to stand by and see my economic interest mismanaged,” he wrote.
He also cited the “unprecedented disruption and competition” in the branded apparel and retail space, and said that under the current public company paradigm, the company is “constrained by short-term objectives and a risk averse board unprepared to underwrite the business initiatives and opportunities that will drive shareholder value.”
Feldenkreis has hired as his financial advisor SCOPE Advisors, an affiliate of SCOPE Capital Group.
Feldenkreis has a 50-plus year history with the company, going back to its days when he founded it as Supreme International in 1967. The company later changed its name when it acquired the Perry Ellis brand. He was executive chairman until September 2017, when he was ousted by the board.