The special committee of the Perry Ellis International board of directors, which comprises the independent directors, on Tuesday confirmed that the committee has terminated discussions with privately held Randa Accessories Leather Goods LLC with respect to the revised, non-binding, unsolicited proposal to acquire 100 percent of the outstanding common stock of Perry Ellis for $28.90 per share in cash.
The special committee of the Perry Ellis Board received on August 13 the following letter from representatives of Randa:
Ladies and Gentlemen:
We are writing in response to the letter received from you on Friday, August 10, 2018, in which you indicated that [company’s largest inbound licensor] is unwilling to consent to Randa’s acquisition of Perry Ellis International, Inc. (the “company”). In response to this letter, we spoke with your financial advisers to express our willingness to further increase our offer price, if George and Oscar Feldenkreis would support our transaction and assist the company in obtaining the requisite [company’s largest inbound licensor] consent. Based on discussions your financial advisers have had since with George’s representatives, we understand that the Feldenkreises have no interest in pursuing our superior proposal.
We remain highly interested in acquiring the company. If Oscar, as CEO of the company and chief steward of delivering shareholder value, is prepared to support our transaction, including in respect of further discussions with [company’s largest inbound licensor], we would be prepared to increase our offer price, currently $1.40 per share higher than the Feldenkreis offer. Failing this support, we see no viable path to a transaction between Randa and the company.
Very truly yours,
Randa Accessories Leather Goods LLC
Jeffrey O. Spiegel
Chief Executive Officer
The special committee, following a careful and thorough review in consultation with its independent financial and legal advisors consistent with its fiduciary duties, and after discussions with representatives of each of George Feldenkreis and Oscar Feldenkreis, determined that the Proposal is no longer reasonably likely to lead to a superior proposal as defined in the Feldenkreis merger agreement. Specifically, based on communications received from the company’s key inbound licensor, it became clear that the key inbound licensor precondition to the Proposal is not likely to be satisfied irrespective of any action taken by the Feldenkreises. Nor is Randa prepared to waive this precondition. As such, the Special Committee determined to terminate discussions with Randa regarding its Proposal.
As previously announced on June 16, Perry Ellis’ board of directors, acting on the recommendation of the special committee of independent directors and with the support of independent financial and legal advisors, approved a $437 million transaction to become a private company through an acquisition led by George Feldenkreis. Under the terms of the Feldenkreis merger agreement, Perry Ellis unaffiliated shareholders will receive $27.50 per share in cash upon closing. The purchase price represents a premium of approximately 21.6 percent to Perry Ellis’ unaffected closing stock price on February 5, 2018, the last trading day prior to George Feldenkreis announcing his proposal to take the company private.
The special committee continues to believe that the Feldenkreis merger agreement is in the best interest of all Perry Ellis shareholders.
