Hidary Group said Everlast Worldwide Inc. violated their merger pact by
accepting a new takeover bid from a UK sporting goods retailer, Sports
Direct.
Brand Holdings, a unit of Sports Direct International Plc last week
raised its offer for Everlast to $134 million, or $33 per share. That
compared with a sweetened bid of $127 million, or $31.25 a share, from
Hidary.
In a letter filed with the U.S. Securities and Exchange Commission,
Hidary said Everlast was “not entitled to terminate the merger
agreement … because the company had not received a superior proposal.”
On June 28, Everlast terminated its merger pact with Hidary in favor of
a deal with Brand Holdings. Both suitors raised their bids the next
day, but Everlast stayed with its new partner, Brand Holdings.
Hidary said Everlast was required under the terms of the merger pact to
give it written notice that it had received a new offer from a rival
suitor. Hidary also was allowed to see any documents related to Brand
Holdings' bid, according to the SEC filing.
Hidary said it was entitled to a four-day window to review those documents and negotiate a potential new offer for Everlast.
“The board's behavior leaves us increasingly concerned that the company
has no intention of complying with its obligations under the merger
agreement,” Hidary said.
“If it did, it would be engaged in negotiations with us right now —
not stiff-arming its legitimate merger partner, the Hidary Group, which
remains ready, willing and able to discuss all aspects of its offer,”
Hidary said.
Hidary said it was continuing to explore all options, including legal
and equitable remedies, regarding Everlast's potential breach of the
merger pact.
