Blog: Timberland sale rumours
Leonie Barrie | 16 November 2006
Timberland might be denying rumours that it’s up for sale, but the market seems to like the news anyway. Shares rose 7.6% following The Wall Street Journal’s report - the most in nine months. The Times, meanwhile, has put a $2bn-plus (£1.05bn) figure on the probable price tag.
The decision to sell follows flagging profits (down by 25% to $51.9m from $69.2m in the third quarter), sales and share price, and is said to be driven by senior members of the Swartz family, who control 70% of Timberland’s voting shares. The company has been criticised for failing to innovate its products, but is also pointing the finger for its woes at EU anti-dumping tariffs on shoes imported from China and Vietnam. In a filing with the US Securities and Exchange Commission last week, it said the duties will cut 2006 operating profits by $6-$7m and 2007 operating profits by $9-10m.
As for potential suitors, well the rumour mill is running wild. Some suggest private equity firms are the front-runners, and others put VF Corp and Nike Inc in the frame.
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