US: Blair talking takeover with Golden Gate
Shares of Blair Corp rose sharply in after-hours trading Thursday (18 January) after the company revealed that it was talking to Golden Gate Capital about a possible acquisition.
San Francisco, California-based Golden Gate has been an active acquirer of specialty retailers in recent years and has emphasised the direct channel in its purchasing activity. Among other properties, it acquired Spiegel and Newport News, units of the bankrupt Spiegel Group, in 2004 and Haband last October.
In a federal regulatory filing with the Securities and Exchange Commission, Golden Gate Capital and its Appleseed's Topco subsidiary said that they collectively own 8.1% of Blair's 3.84m shares of stock.
The group sent a letter to Blair's board on 3 January offering to acquire the direct marketer of apparel and home goods for US$37.50 a share, or about $144m.
The offer represents a 3.9% premium to Blair's closing price of $36.10 on the American Stock Exchange Thursday. However, Blair disclosed that it was talking with GGC after the close of the markets, and its shares rose 94 cents to $37.04 in after-hours trading.
"Since receiving the letter, we have been in discussions with this group," said Craig Johnson, chairman of Blair. "Although it is premature to comment further, I do want to emphasise that we will continue to act in the best interest of the company and its stakeholders."
At the time of the completion of its Haband acquisition nearly three months ago, Golden Gate managing director Stefan Kaluzny commented in a statement: "With the addition of Haband, we have significantly increased our offerings to the aging baby boomer demographic and are now the largest direct retailer serving this rapidly growing segment of the population.
"Furthermore, the addition of Haband to our 10 existing titles creates ever greater opportunities for each to benefit from the scale and expertise of the group."
The company, which houses its direct channel properties in its Catalog Holdings group, said at the time: "While each title will continue to operate independently, there exist significant opportunities for each to benefit from being part of an industry-leading portfolio. Golden Gate continues to seek additional acquisitions of similar brands."
Few firms mirror the Haband profile as well as Blair, which in fiscal 2006 had sales of $456.6m, much of it to the same boomer group addressed by Haband.
The bid presents the possibility of new management as well as new ownership for Blair. Just last month, the company announced that John Zawacki would retire as president and chief executive officer on 1 April. He's been CEO since 1999 and with the company since 1972.
By Arnold J Karr.
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