Unanimously Reiterates Commitment to George
Feldenkreis Transaction and Reaffirms Intention to Recommend that
All Perry Ellis Shareholders Vote FOR the Feldenkreis
Transaction
The Special Committee of the Perry Ellis International, Inc.
(NASDAQ:PERY) (“Perry Ellis” or the “Company”) Board of Directors,
which is composed of the independent directors, today reaffirmed
its intention to recommend that all Perry Ellis shareholders vote
FOR the Feldenkreis transaction.
As previously announced on June 16, 2018, Perry Ellis’ Board of
Directors, acting on the unanimous recommendation of the Special
Committee of independent directors and with the support of
independent financial and legal advisors, unanimously 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 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 noted that Randa’s July 1, 2018 proposal
to acquire 100% of the fully diluted common stock of Perry Ellis
for $28.00 per share in cash was not solicited and is substantially
similar to a non-binding $27.75 per share proposal made by Randa
during the Special Committee’s strategic review process. The
Special Committee unanimously determined, after consultation with
its legal and financial advisors, that the Randa proposal does not
satisfy the requirements in the Feldenkreis merger agreement for
granting due diligence access or commencing negotiations with
respect to a competing takeover proposal. In arriving at its
determination, the Special Committee considered, in relation to a
1.8% potential price increase from Randa’s unsolicited proposal,
among other things, that:
- the proposal is highly-conditional, non-binding and
insufficient in terms of value and certainty of the provided debt
financing commitments, as well as the lack of evidence of
sufficient cash equity on hand;
- the additional timing to enter into and complete a potential
transaction with Randa;
- the inclusion of an unprecedented 3% fee payable by the Company
to Randa if shareholders vote down the transaction, compared to no
such penalty if shareholders vote down the Feldenkreis merger;
and
- a number of other terms affecting shareholder value or
certainty are inferior, including termination fees, additional
risks to closing, and the lack of appraisal rights for
shareholders.
Based on the totality of the circumstances considered in
comparison to the potential for a slight price improvement, the
Special Committee concluded that re-engaging with Randa at the
price offered was not in the best interest of shareholders.
The Special Committee continues to unanimously believe that the
Feldenkreis merger agreement is in the best interest of all Perry
Ellis shareholders.
As previously announced, the Feldenkreis transaction is expected
to close in the second half of calendar year 2018, is subject to
the satisfaction of customary closing conditions and approvals,
including approval by Perry Ellis shareholders (including a
majority of the shares owned by shareholders other than the
Feldenkreis family or any officers or directors of the Company),
receipt of regulatory approvals and other customary closing
conditions.
PJ SOLOMON is serving as financial advisor to the Special
Committee, Paul, Weiss, Rifkind, Wharton & Garrison LLP and
Akerman LLP are serving as the Special Committee’s legal counsel,
and Innisfree M&A Incorporated is serving as the Company’s
proxy solicitor.
About Perry Ellis InternationalPerry Ellis
International, Inc. is a leading designer, distributor and licensor
of a broad line of high quality men's and women's apparel,
accessories and fragrances. The Company's collection of dress and
casual shirts, golf sportswear, sweaters, dress pants, casual pants
and shorts, jeans wear, active wear, dresses and men's and women's
swimwear is available through all major levels of retail
distribution. The Company, through its wholly owned subsidiaries,
owns a portfolio of nationally and internationally recognized
brands, including: Perry Ellis®, An Original Penguin® by
Munsingwear®, Laundry by Shelli Segal®, Rafaella®, Cubavera®, Ben
Hogan®, Savane®, Grand Slam®, John Henry®, Manhattan®, Axist®,
Jantzen® and Farah®. The Company enhances its roster of brands by
licensing trademarks from third parties, including: Nike® for
swimwear, Callaway®, PGA TOUR®, Jack Nicklaus® for golf apparel and
Guy Harvey® for performance fishing and resort wear. Additional
information on the Company is available
at http://www.pery.com.
Safe Harbor StatementWe caution readers that
the forward-looking statements (statements which are not historical
facts) in this release are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on current expectations rather
than historical facts and they are indicated by words or phrases
such as “anticipate,” “believe,” “budget,” “contemplate,”
“continue,” “could,” “estimate,” “expect,” “guidance,” “indicate,”
“intend,” “may,” “might,” “plan,” “possibly,” “potential,”
“predict,” “probably,” “proforma,” “project,” “seek,” “should,”
“target,” or “will” or the negative thereof or other variations
thereon and similar words or phrases or comparable terminology.
Such forward-looking statements include, but are not limited to,
statements regarding Perry Ellis’ strategic operating review,
growth initiatives and internal operating improvements intended to
drive revenues and enhance profitability, the implementation of
Perry Ellis’ profitability improvement plan and Perry Ellis’ plans
to exit underperforming, low growth brands and businesses. We have
based such forward-looking statements on our current expectations,
assumptions, estimates and projections. While we believe these
expectations, assumptions, estimates and projections are
reasonable, such forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, and other
factors that may cause actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements, many of which are beyond our control. These factors
include: general economic conditions, a significant decrease in
business from or loss of any of our major customers or programs,
anticipated and unanticipated trends and conditions in our
industry, including the impact of recent or future retail and
wholesale consolidation, recent and future economic conditions,
including turmoil in the financial and credit markets, the
effectiveness of our planned advertising, marketing and promotional
campaigns, our ability to contain costs, disruptions in the supply
chain, including, but not limited to these caused by port
disruptions, disruptions due to weather patterns, our future
capital needs and our ability to obtain financing, our ability to
protect our trademarks, our ability to integrate acquired
businesses, trademarks, trade names and licenses, our ability to
predict consumer preferences and changes in fashion trends and
consumer acceptance of both new designs and newly introduced
products, the termination or non-renewal of any material license
agreements to which we are a party, changes in the costs of raw
materials, labor and advertising, our ability to carry out growth
strategies including expansion in international and
direct-to-consumer retail markets; the effectiveness of our plans,
strategies, objectives, expectations and intentions which are
subject to change at any time at our discretion, potential cyber
risk and technology failures which could disrupt operations or
result in a data breach, the level of consumer spending for apparel
and other merchandise, our ability to compete, exposure to foreign
currency risk and interest rate risk, the impact to our business
resulting from the United Kingdom’s referendum vote to exit the
European Union and the uncertainty surrounding the terms and
conditions of such a withdrawal, as well as the related impact to
global stock markets and currency exchange rates; possible
disruption in commercial activities due to terrorist activity and
armed conflict, actions of activist investors and the cost and
disruption of responding to those actions, and other factors set
forth in Perry Ellis’ filings with the Securities and Exchange
Commission. Forward-looking statements also may include information
concerning the proposed merger transaction, including unexpected
costs or liabilities, delays due to regulatory review, certain
closing conditions (including the committed financing) may not be
timely satisfied or waived, litigation may be commenced and general
and business conditions may change. Investors are cautioned
that all forward-looking statements involve risks and uncertainties
and factors relating to the proposed transaction, including those
risks and uncertainties detailed in Perry Ellis’ filings with the
SEC, all of which are difficult to predict and many of which are
beyond Perry Ellis’ control. You are cautioned not to place undue
reliance on these forward-looking statements, which are valid only
as of the date they were made. We undertake no obligation to update
or revise any forward-looking statements to reflect new information
or the occurrence of unanticipated events or
otherwise.
Important Additional Information And Where To Find
ItThe Company, its directors and certain of its executive
officers may be deemed to be participants in the solicitation of
proxies from Company stockholders in connection with the proposed
transaction. The Company intends to file a proxy statement and
WHITE proxy card with the U.S. Securities and Exchange Commission
(the “SEC”) in connection with any such solicitation of proxies
from Company stockholders. COMPANY STOCKHOLDERS ARE STRONGLY
ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND ACCOMPANYING WHITE
PROXY CARD WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN
IMPORTANT INFORMATION. Information regarding the ownership of the
Company’s directors and executive officers in Company stock,
restricted stock and options is included in their SEC filings on
Forms 3, 4, and 5, which can be found through the Company’s website
(http://investor.pery.com), or through the SEC’s website at
www.sec.gov. Information can also be found in the Company’s other
SEC filings, including the Company’s Annual Report on Form 10-K for
the year ended February 3, 2018 and the Form 10-K/A filed by the
Company with the SEC on June 1, 2018. More detailed and updated
information regarding the identity of potential participants, and
their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement and other
materials to be filed with the SEC in connection with the proposed
transaction. Stockholders will be able to obtain any proxy
statement, any amendments or supplements to the proxy statement and
other documents filed by the Company with the SEC for no charge at
the SEC’s website at www.sec.gov. Copies will also be available at
no charge at the Company’s website at http://investor.pery.com, by
writing to Perry Ellis International, Inc., at 3000 N.W. 107
Avenue, Miami, FL 33172.
Certain Participant InformationIn accordance
with Rule 14a-12(a)(1)(i) under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), the following directors,
executive officers and other employees of Perry Ellis are deemed to
be participants in the solicitation of proxies from Perry Ellis’
shareholders in connection with the proposed transaction and, as of
the date hereof, beneficially own the amount of shares of Perry
Ellis’ common stock, $0.01 par value per share, indicated adjacent
to his or her name: (i) Perry Ellis directors: Joe Arriola (15,590
shares), Jane E. DeFlorio (22,710 shares), George Feldenkreis
(1,716,862 shares), Oscar Feldenkreis (1,223,329 shares), Bruce J.
Klatsky (21,723 shares), Michael W. Rayden (21,723 shares), and J.
David Scheiner (26,205 shares), and (ii) Perry Ellis executive
officers and other employees: David Enright (31,706 shares), Jorge
Narino (14,988 shares), Stanley Silverstein (73,666 shares) and
John Voith (64,624 shares). The business address for each person is
c/o Perry Ellis International, Inc., 3000 N.W. 107th Avenue, Miami,
FL 33172. More detailed and updated information regarding the
identity of potential participants, and their direct or indirect
interests, by security holdings or otherwise, will be set forth in
the proxy statement, including the schedules and appendices
thereto, and other materials to be filed with the SEC in connection
with the proposed transaction.
Contacts
Investor: Innisfree M&A Incorporated Arthur
Crozier / Jennifer Shotwell / Scott Winter 212-750-5833
orMedia:Joele Frank, Wilkinson Brimmer KatcherEd
Trissel / Sharon Stern / Jeff Kauth212-355-4449
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