Shortly
following a letter sent by Aquamarine Capital Management to the
Everlast Worldwide Board challenging the terms of the company’s sale to
Sport Direct, the Board received a letter from the company’s largest
independent stockholder, Burlingame Asset Management, LLC, reiterating
the case made by Aquamarine that the board had not maximized
shareholder value in its negotiations to sell the company.

“Gentlemen,
you have only one fiduciary duty now that you have decided to sell the
Company–to maximize value for all Everlast stockholders. Based on the
publicly available information about your negotiations with Brands
Holdings and the Hidary Group, we are unconvinced that you have
discharged that duty,” Burlingame, which own 14.3% of Everlast common
shares, wrote in its letter.

Everlast
on June 29 reached a deal to be acquired by Sports Direct for $33 a
share, or $182 million. The offer topped an earlier offer by Hidary
Group of $31.25 a share.

Burlingame
noted that Hidary Group's offer may be superior since it includes an
option for shareholders to roll over up to 50% of their interest into
the surviving private entity.

“In
our view, the roll over option gives stockholders the ability to
participate in the future successes of Everlast, while also deferring
taxes on up to half of their gains,” said Burlingame. “The tax deferral
alone probably makes the Hidary proposal superior to stockholders; let
alone what value they could ultimately receive by rolling over up to
half their interests into the surviving private company.