K2 Chairman and Chief Executive Richard Heckmann confirmed on Monday that Rawlings Major League Baseball contract is the stumbling block in the acquisition talks between the two companies.
Heckman said he would abandon K2’s proposed $74 million purchase of Rawlings Sporting Goods Inc. if an agreement could not be reached to transfer Rawlings commercial contract with Major League Baseball. K2 is engaged in ongoing talks with the baseball league to resolve the dispute.
Heckmann, speaking at the Roth Capital Partners Conference, also said he had no intention of adjusting the deal’s price structure, which calls for Rawlings shareholders to receive 0.95 shares of K2 stock for each share they own.
“They (Major League Baseball) are using this change of control consent as a lever and were negotiating at this point,” Heckmann said. “The negotiations got pretty tough. But If we dont get the deal that we want from baseball, were not going to close this transaction.”
Heckmann’s comments came after last weeks SEC filing by K2 suggesting that it would not close the deal unless it could reach agreements to transfer certain contracts Rawlings holds with commercial partners.
