Everlast Worldwide Inc. said that it will be required to pay Hidary Group a $3 million termination fee under certain circumstances if it ends a merger agreement between the companies during the current “go shop” period, according to a filing with the Securities & Exchange Commission. If the agreement is ended after the period ends, it could be liable for a $4.5 million termination fee to Hidary.
According to the filing, the merger agreement contains a provision giving Everlast 30 days, through July 1, to “solicit additional interest in a transaction.”
On June 1, Everlast said it had agreed to be acquired by Hidary for more than $146 million, or $26.50 a share, in cash.
In a press release on June 4, Aquamarine Capital Management LLC, which holds a 2.3% stake in the company, said it plans to vote against the takeover proposal, saying the Hidary offer “significantly undervalues both the brand and Everlast Worldwide.”
Hidary, a New York-based investment group, currently has a license to design and sell men's activewear under the Everlast label.