BPW Acquisition Corp. (“BPW”) (AMEX: BPW), a publicly held
special purpose acquisition company, today announced that it has
entered into a definitive merger agreement pursuant to which it
will be acquired by The Talbots, Inc. (NYSE: TLB), a specialty
retailer of women’s apparel. Upon closing the combined company will
retain Talbots’ ticker symbol and will trade on the New York Stock
Exchange.
Under the terms of the merger agreement, the proceeds of BPW’s
cash-in-trust of approximately $350 million, in conjunction with
additional financing obtained by Talbots, including a new $200
million revolving credit facility for which a commitment has been
received from GE Capital, will be used to retire all of Talbots’
existing debt. In addition, Talbots will acquire all of the
outstanding shares of Talbots common stock held by AEON (U.S.A.),
Inc., which represents a more than 54% stake currently. BPW common
shares will be exchanged for the equivalent of $11.25 per BPW share
in Talbots’ common shares within a floating exchange ratio range of
between 0.9000 – 1.3235 Talbots shares per BPW share, based on the
trading prices of Talbots common stock prior to the BPW
stockholders meeting. Pro forma for the merger, BPW’s shareholders
will own between approximately 60-69% of Talbots’ common
shares.
As part of the transaction, the Sponsors and certain directors
of BPW will surrender an aggregate of 1,852,941 shares of BPW
common stock, or approximately 30% of the shares held by the
Sponsors and such directors, for no consideration.
The transaction also contemplates that, following receipt of BPW
stockholder approval, Talbots will undertake an exchange offer for
existing BPW warrants held by public warrantholders. The exchange
offer will provide that 50% of the BPW warrants held by public
warrantholders will be exchanged for the equivalent of $1.125 per
BPW warrant in Talbots common shares through a floating exchange
ratio of between .09000 - .13235 Talbots shares per BPW warrant,
based on the trading prices of Talbots common stock prior to the
BPW stockholders meeting, that the balance of BPW warrants held by
public warrantholders would be exchanged for new Talbots warrants
with new terms, including a term of 5 years and a strike price set
at a premium of 30% to the closing valuation of Talbots’ common
stock as determined under the merger agreement. The Sponsors and
certain directors of BPW have agreed to exchange all of their
warrants for Talbots common stock at the same floating exchange
ratio of between .09000 - .13235 Talbots shares per BPW
warrant.
Trudy Sullivan will remain President and Chief Executive Officer
of Talbots, and will continue to lead the current management team,
which is successfully implementing a turnaround of the company.
Gary S. Barancik, Chief Executive Officer of BPW said, “This is
an outstanding opportunity for both BPW and Talbots. BPW is
extremely pleased to be partnering with Talbots and its management
team led by Trudy Sullivan. The merger of BPW and Talbots provides
Talbots with the strategic capital necessary to strengthen its
balance sheet, the working capital necessary to support future
growth and the financial flexibility necessary to complete the
operational improvements and strategic repositioning now well
underway as demonstrated by the third quarter results. Furthermore,
the merger provides BPW stockholders and warrant holders with
immediate and significant value and the opportunity to participate
in the future growth of Talbots, one of the country’s best known
specialty retailers of women’s apparel.”
Trudy F. Sullivan, Talbots President and Chief Executive Officer
said, “Over the past two years we reinvigorated the Talbots brand,
re-engineered our supply chain, divested non-core businesses, and
streamlined our cost structure to address both competitive and
market pressures, putting in place a strong foundation for our
future. We are now beginning to realize the benefits of this hard
work, and we are delighted to have the support of BPW stockholders
as we begin the next chapter of growth at Talbots. By joining with
BPW, Talbots will have a stronger and more flexible balance sheet
and capital structure and be well positioned for future value
creation for all of our stakeholders. This is an exciting time for
Talbots as this transaction will create a stronger company with
significantly enhanced ability to execute on our strategic plans
and opportunities.”
The proposed transaction is subject to limited customary closing
conditions and regulatory approvals, receipt of necessary financing
by Talbots, including as contemplated by a commitment letter from
GE Capital, BPW stockholder approval and the completion of the BPW
warrant exchange offer on the terms described in the merger
agreement. Aeon, as majority stockholder of Talbots, has approved
the issuance of Talbots stock in the transaction and no further
vote of Talbots stockholders will be required to complete the
transaction.
Wachtell, Lipton, Rosen & Katz and Akin Gump Strauss Hauer
& Feld LLP acted as legal advisors to BPW in connection with
the transaction.
Financo Securities, LLC provided a fairness opinion to BPW
Acquisition Corp. in connection with the transaction.
About BPW Acquisition Corp.
BPW Acquisition Corp. is a special purpose acquisition company
formed in 2008 for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or
other similar business combination with one or more operating
businesses.
About The Talbots, Inc.
The Talbots, Inc. is a leading specialty retailer and direct
marketer of women’s apparel, shoes and accessories. At the end of
third quarter 2009, the Company operated 589 Talbots brand stores
in 46 states, the District of Columbia, and Canada. Talbots brand
on-line shopping site is located at www.talbots.com.
Statements made in this press release that are forward-looking
in nature are intended to be “forward-looking statements” within
the meaning of Section 21E of the Securities Exchange Act of
1934 and may involve risks and uncertainties. These statements
include, without limitation, statements regarding the consummation
of the transaction, its effects on future earnings or other
operating results, the expected closing date of the transaction,
any other effect or benefit of the transaction, and any other
statements that are not historical facts. These risks and
uncertainties include the ability of Talbots and BPW to achieve the
benefits currently expected from the proposed transaction and the
timing, receipt of approvals and satisfaction of conditions for the
merger. Other risks and uncertainties, which are more fully
described in documents filed by Talbots and by BPW with the
Securities and Exchange Commission, including Annual Reports on
Form 10-K, could cause actual results to differ from those
contained in the forward-looking statements.
Important Additional Information and Where to Find It
Talbots intends to file with the SEC a Registration Statement on
Form S-4 in connection with the transaction, and Talbots and BPW
intend to file with the SEC and mail to their respective security
holders an Information Statement/Proxy Statement/Prospectus in
connection with the transaction. Talbots intends to file a tender
offer statement and other documents, as required, with the SEC in
connection with the warrant exchange offer. Investors and
security holders are urged to read the Registration Statement, the
Information Statement/Proxy Statement/Prospectus and the tender
offer statement carefully when they are available because they
contain important information. Investors and security holders
will be able to obtain free copies of the Registration Statement,
the Information Statement/Proxy Statement/Prospectus the tender
offer statement and other documents filed with the SEC by Talbots
and BPW through the web site maintained by the SEC at www.sec.gov. These documents may also be
obtained free of charge from Talbots by requesting them in writing
to Investor Relations Department, One Talbots Drive, Hingham, MA
02043 or by telephone at (781) 741-4500. The documents filed by BPW
may also be obtained by requesting them in writing to Arjay
(Richard) Jensen, SVP of BPW at BPW Acquisition Corp., 750
Washington Boulevard, Stamford, CT 06901 or by telephone at (212)
287-3310.
Talbots and its directors and executive officers may be deemed
to be participants in the solicitation of proxies from the security
holders of BPW in connection with the transaction described herein.
Information regarding these directors and executive officers will
be included in the Information Statement/Proxy
Statement/Prospectus. You can find information regarding
these directors and executive officers in Talbots’ definitive proxy
statement for its 2009 Annual Meeting of Stockholders, which was
filed with the SEC on April 24, 2009. This document is available
free of charge at the SEC’s web site at www.sec.gov and through Talbots
by requesting them in writing to Investor Relations Department, One
Talbots Drive, Hingham, MA 02043 or by telephone at (781)
741-4500.
BPW and its directors and executive officers also may be deemed
to be participants in the solicitation of proxies from the security
holders of BPW in connection with the transaction described herein.
Information regarding these directors and executive officers will
be included in the Information Statement/Proxy
Statement/Prospectus. You can find information regarding
these directors and executive officers in BPW’s Annual Report on
Form 10-K for its fiscal year ended December 31, 2008, which was
filed with the SEC on March 30, 2009. This document is available
free of charge at the SEC’s web site at www.sec.gov and from BPW by
requesting them in writing to Arjay (Richard) Jensen, SVP of BPW at
BPW Acquisition Corp., 750 Washington Boulevard, Stamford, CT 06901
or by telephone at (212) 287-3310.
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