TALK OF NIKE BUYOUT BID BOOSTS STARTER STOCK
Byline: Valerie Seckler
NEW YORK — Starter Corp.’s stock climbed 11.5 percent to 11 1/8 at one point Thursday afternoon on rumors that Nike is interested in buying the maker of licensed sports apparel.
However, Starter chief financial officer John Warfel said the New Haven, Conn.-based firm is “not negotiating with Nike.”
While neither confirming or denying the report, Nike spokeswoman Donna Gibbs said, “We’re going to stop calling them rumors and start calling them Dorfmans,” referring to financial columnist Dan Dorfman, who she said had aired the rumor on CNBC Thursday afternoon.
Starter’s stock eventually closed Thursday unchanged at 9 3/4 on the New York Stock Exchange, on volume of 1.3 million shares. The stock’s average daily volume is 92,800.
Asked what might be fueling the stock’s rise other than the rumors, Warfel said, “It’s nothing we’re doing here at the company. We’re on record as expecting a fourth-quarter loss and a poor first half.
“The only good news we’ve had lately is the end of the hockey strike.”
Warfel wasn’t able to provide an estimate for the loss the company will take in the quarter ended Dec. 31, 1994.
The issue’s price began to climb last week, apparently fueled by market talk that Reebok was an interested suitor. While Reebok declined comment, Faye Landes, an analyst at Smith Barney Shearson, declared, “I think Reebok is definitely not going to do it.”
As for the Nike rumor, Landes, who closely follows athletic shoe companies, said: “I never say never, but I don’t know why they’d want to do it because the licensed fashion business has dried up and it would be a lot to absorb with Canstar.”
Nike is in the midst of completing a $395 million purchase of Canstar Sports Inc., a Canadian hockey equipment manufacturer. The cash tender, begun on Jan. 6, will be open until Feb. 9, Gibbs noted, with consummation of the transaction expected around March 1.
For the nine months ended Sept. 30, Starter reported net income of $10.9 million, or 41 cents a share, off 55.3 percent from pro forma net income of $24.4 million, or 90 cents, a year ago. Sales hit $300.1 million, up 7 percent from $280.4 million.
— Fairchild News Service