Sources with knowledge of the proposal said the offer is at a per-share price of $27.50, representing a 22 percent premium to the stock close of $22.62 on Monday. Shares of the company rose 10.7 percent to $25.65 in after-hours trading Tuesday.
These sources also said Feldenkreis is partnering with Fortress Investment Group for the offer. The individuals told WWD that between the debt and equity Feldenkreis owns, plus the capital provided by Fortress, the hope is that the Perry Ellis board would consider the offer on an “expeditious basis” and that a special committee would be formed to review the proposal, which was submitted on Tuesday.
Feldenkreis’ offer comes about six months after he was pushed out as executive chairman. He led the company for more than 50 years and served as chairman and chief executive officer since 1993. An activist investor in 2015, citing corporate governance, pushed for separation of the two positions. That led to Feldenkreis becoming executive chairman and having his son Oscar take on the role of ceo and president in April 2016. Oscar Feldenkreis was president of the company.
The family’s ownership stake in the company’s stock is valued at over $100 million.
Individuals familiar with George Feldenkreis’ thinking said he believes that the time is right to take the company private. Further, they said the current company path could hurt the value of the family’s equity stake.
Management teams that find themselves facing activists wanting to create shareholder value quickly often find themselves at odds with the new investors seeking different goals. That thinking — the criticism goes — is focused more on the financial bottom line on a short-term basis than on what’s good for the company’s overall business when looked at from the lens of a longer-term perspective.
Executives at Perry Ellis could not be reached for comment. Feldenkreis is said to be advised by Peter Comisar and his new firm SCOPE Capital Partners. Comisar is a former banker at Goldman Sachs and was head of investment banking at Guggenheim Partners. He could not be reached for comment.