M&A

Perry Ellis Ends Takeover Talks With Randa

The apparent demise of Randa's $460 million proposal clears the way for Perry Ellis to be taken private by founder George Feldenkreis.
Matthew HellerAugust 14, 2018

Perry Ellis International said Tuesday it had terminated talks with takeover suitor Randa Accessories, clearing the way for the apparel maker to be taken private by second-largest shareholder and founder George Feldenkreis.

Randa had raised its offer to purchase Perry Ellis by 90 cents to $28.90 per share earlier this month, valuing the company at nearly $460 million and representing a 5.1% premium to Feldenkreis’ $27.50, or $437 million, bid.

But Perry Ellis received a letter from Randa on Monday indicating a key inbound Perry Ellis licensor had refused to consent to Randa’s acquisition of the company. Randa had set a precondition that it would need to speak with the licensor before formalizing any deal.

“The [board’s] special committee determined that the proposal is no longer reasonably likely to lead to a superior proposal,” Perry Ellis said in a news release Tuesday.

Based on communications with the licensor, “it became clear that the key inbound licensor precondition to the proposal is not likely to be satisfied irrespective,” the statement said, adding, “Nor is Randa prepared to waive this precondition. As such, the special committee determined to terminate discussions with Randa regarding its proposal.”

Perry Ellis said its special committee “continues to believe that the Feldenkreis merger agreement is in the best interest of all Perry Ellis shareholders.” But on news of the Randa talks being terminated, its shares fell 5.5% to $27.48.

The company was founded in 1967 as Supreme Court, changing its name after acquiring the famed Perry Ellis fashion house in 1999. Feldenkreis was ousted as executive chairman in September 2017 but his son Oscar serves as chief executive and he made his buyout offer in February.

The Perry Ellis board announced in June it had accepted Feldenkreis’ offer but Randa, a maker of men’s accessories, intervened last month by making its initial $28-per-share bid. The Feldenkreis offer represents a 21.6% premium to the undisturbed share price.

“That’s my baby,” Feldenkreis told The Miami Herald in May. “That’s what I created, from a zero company to a billion-dollar company.”