Kellwood Company has entered into a merger agreement with Sun Capital providing for a prompt merger if Sun Capital's tender offer is successful on February 12, 2008, and upon the closing of the tender offer Sun Capital owns a majority of the company's shares. The Board of Directors is now recommending that stockholders tender their shares into the offer. The Board considered a number of factors in making its decision, including its determination that the $21.00 price being offered is fair, the absence of superior bids, and the company's belief that a majority of the stockholders intend to tender their shares.
 
The merger agreement provides that Kellwood will remove all impediments to the tender offer that are in its control, so that Sun Capital's $21.00 per share cash tender offer can be consummated on February 12, 2008, subject to a sufficient number of shares being tendered in the offer such that, upon the closing of the offer, Sun Capital owns a majority of the company's shares. The merger agreement also provides that once shares are paid for in the tender offer, Sun Capital will take control of the Kellwood Board of Directors.


Under the terms of the merger agreement, Sun Capital will assume control of the Kellwood Board upon the completion of the tender offer.

 

Jason Bernzweig, VP of Sun Capital, said, “Sun Capital is pleased to have reached an agreement with Kellwood and that Kellwood’s Board is now recommending our tender offer to its shareholders. We believe this transaction is in the best interests of shareholders, employees, vendors and customers. We look forward to working collaboratively with Kellwood to ensure a smooth and expeditious transition and urge all shareholders to tender their shares to guarantee they receive prompt payment for their holdings. As we have said before, we are prepared to commit substantial resources beyond the purchase price to build Kellwood’s business, and we will work closely with management and employees at Kellwood to strengthen the Company and develop its branded portfolio.”

 

Kellwood further announced today that it is terminating its cash tender offer for up to $60,000,000 aggregate principal amount of its 7.875% Senior Notes due 2009 identified in the Offer to Purchase dated January 9, 2008. The company said in its January 27, 2008 announcement that it intended to rescind the debt tender offer to allow Sun Capital's $21.00 per share cash tender offer to close on February 12, 2008 in the event that upon the closing of the offer, Sun Capital owns a majority of the company's shares.

“As a strong, private company, Kellwood will continue to execute on its strategic priorities to position the Company as a brand-focused marketing enterprise,” said Robert C. Skinner, Jr., chairman, president and chief executive officer.


Banc of America Securities LLC and Morgan Stanley & Co. Incorporated are acting as financial advisors, and McDermott Will & Emery LLP and Sonnenschein Nath & Rosenthal LLP are serving as legal counsel, to Kellwood.