USA: Duck Head Avoids Hostile Takeover Bid
Duck Head Apparel has avoided a potentially hostile takeover bid by shareholder Bettis Rainsford. Rainsford, who has a 13.9 per cent stake in the company, said Monday he was ending the fight because Duck Head's board of directors has taken several steps to pump up the company's stock price. Duck Head announced last week it had hired an investment banking firm to explore strategic options, including a merger or sale. Rainsford's withdrawal of his proxy solicitations came two days before a scheduled showdown at the company's annual meeting at Chateau Elan in Braselton. As previously reported, Rainsford notified the company last month that he intended to nominate directors, including himself, to the company's board and also said that Knight Textile Corp of South Carolina may offer to buy the company. Knight Textile is owned by Talmadge Knight, a nominee who beneficially has a 4.1 per cent stake in Duck Head. Rainsford is the co-founder and former chief financial officer of Delta Woodside Industries, the former parent of Duck Head. He's now a business developer based in Edgefield, S.C. The Winder-based manufacturer of casual clothing has foundered in recent years despite the booming popularity of khaki pants. A restructuring at Duck Head has helped reduce significant losses in recent years. Last year the company lost $7.4m on sales of $53.3m. Shares had been selling around $1 on the American Stock Exchange. Duck Head closed at $ 3.25 Monday, up 38 cents, or 13 per cent. Among plans announced last week by Duck Head is a share repurchase program for up to $3m of outstanding shares. The company also said it would remove the "poison pill" device from its shareholder rights plan by March 31. The measure is designed to discourage a takeover.
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