Goody's Family Clothing, Inc., GMM Capital LLC, and Prentice Capital Management, LP, announced that they have entered into a definitive agreement providing for affiliates of GMM and Prentice to acquire Goody's for an all cash price of $9.60 per share.
About the Transaction
Under the terms of the agreement, affiliates of GMM and Prentice will commence a tender offer for all of the issued and outstanding shares of common stock of Goody's Family Clothing, Inc. for $9.60 per share. Consummation of the tender offer is subject to certain terms and conditions, including the tender of such number of shares, which together with the shares beneficially owned by GMM and Prentice equal at least 51% of the outstanding common stock, on a fully diluted basis. Subsequent to the successful completion of the tender offer, any remaining shares of Goody's common stock will be acquired in a cash merger at a price of $9.60 per share. The merger agreement in the form executed by affiliates of GMM and Prentice contains substantially the same terms as are in the Agreement and Plan of Merger with certain affiliates of Sun Capital Partners IV, dated October 7, 2005. Robert M. Goodfriend, chairman and CEO of Goody's, members of his family and family trusts who beneficially own an aggregate of approximately 42% of the outstanding shares have agreed to tender their shares in the transaction. Mr. Goodfriend and his family and related entities also granted an option to affiliates of GMM and Prentice to acquire their shares at the merger price of $9.60 per share. The option would be exercisable for a 30-business-day period in the event that the GMM/Prentice merger agreement is terminated as a result of a Superior Proposal (as defined in the merger agreement) and under certain other circumstances if Goody's terminates the merger agreement. If such option were exercised, GMM and Prentice would beneficially own an aggregate of approximately 48% of the outstanding shares of common stock of Goody's, inclusive of shares already owned by them.
Consummation of the transaction is not conditioned upon financing or due diligence.
The Board of Directors of Goody's has unanimously approved the transaction. Rothschild, Inc. is providing financial advisory services to the Board.
Goody's had previously entered into an Agreement and Plan of Merger with certain affiliates of Sun Capital Partners IV on October 7, 2005, at a cash price of $8.00 per share. Goody's received an all cash offer of $8.85 per share from GMM and Prentice on October 23, 2005 and its Board of Directors determined that such offer was a Superior Proposal (as such term is defined in the Agreement and Plan of Merger with the Sun Capital affiliates). As required under the merger agreement with the Sun Capital affiliates, Goody's provided four-business-day's notice to the Sun Capital affiliates that it intended to terminate the merger agreement with the Sun Capital affiliates at the close of business on October 27, 2005, on the basis of its receipt of a Superior Proposal. During such four-business-day period, Goody's was required to negotiate in good faith with the Sun Capital affiliates with respect to a possible revised proposal (unless Sun Capital affiliates elected to terminate the merger agreement sooner or waived the four-business-day period). Sun Capital provided written notice to Goody's last night that it had terminated the merger agreement and of its entitlement to the termination fee and expenses under the merger agreement. Goody's Board subsequently approved a revised proposal of $9.60 from Prentice and GMM after having received another bid from a third party.
Mr. Goodfriend commented, “We are pleased that this transaction provides a price that represents a 20% premium over the agreement we had signed with Sun Capital. We are proud that the well-respected GMM and Prentice organizations recognized the value of the business we have built. I believe that the lengthy and thoughtful process that our Board of Directors has presided over helped us to maximize shareholder value. I wish to thank all of the Goody's associates who have worked tirelessly to help us achieve this result.”
Michael Zimmerman of Prentice Capital commented, “We are excited about our acquisition of Goody's and its highly respected organization. We look forward to applying the combined experience of GMM Capital and Prentice Capital in retailing to help the great Goody's franchise to realize its full potential.”
