DONNKENNY REPORTEDLY SIGNS DEAL FOR PURCHASE OF EDDIE HAGGAR LIMITED

Byline: Rich Wilner

NEW YORK — Donnkenny Apparel Inc. has signed an agreement in principle to purchase substantially all of the assets of Eddie Haggar Limited Inc., according to market reports.
The terms of the deal were not known, and both sides refused to comment on the report.
Dallas-based Eddie Haggar filed for Chapter 11 protection Jan. 24, saying it would seek a buyer for its business. Eddie Haggar Jr., chairman, said at the time of the filing that he was in negotiations with a publicly held women’s apparel maker but declined to name the company.
Persons close to Eddie Haggar say that company is Donnkenny, which has been interested in purchasing the manufacturer of moderate-price women’s and juniors sportswear for some time.
On Feb. 8, Gerald P. Buccino, of Buccino & Associates, New York, a turnaround company named to run Eddie Haggar, hired a business adviser to flush out prospective purchasers. That effort reportedly resulted in several bids but none higher or better than Donnkenny’s.
Donnkenny, the manufacturer of sportswear for the moderate and mass market, earned $10.1 million, or $1.51 per share, in 1994 on sales of $158.8 million. Donnkenny operations include a Mickey & Co. division with licenses with Walt Disney Co., Lewis Frimel/Flirts sleepwear and sportswear division, with Major League Baseball and Looney Tunes licenses and its Donnkenny sportswear division.
Haggar, created in 1990 when Eddie Haggar purchased the women’s apparel division of Haggar Apparel Co., now Haggar Clothing Co., had sales of $100 million last year. When it filed, Eddie Haggar listed $38.5 million in assets and $48.4 million in liabilities.
Donnkenny’s balance sheet is strong and the company is quite capable of closing the deal, analysts said. It has 20 million shares authorized with only 6.8 million outstanding and has a low debt load at $27 million.
Eddie Haggar is expected to announce the deal this week, when it will seek bankruptcy court approval of the deal. Any deal is subject to higher or better offers.
— Fairchild News Service

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