Everlast investor objects to merger deal with Brands

By Lisa Kerner

Charlotte, N.C., July 13 - Everlast Worldwide, Inc. investor Aquamarine Capital Management accused the company's board of not conducting an open and transparent bid process. Aquamarine also expressed "displeasure" at "the handling of events which have taken place since June 1, 2007, when the company first agreed to be acquired by the Hidary Group Acquisitions, Inc. for $26.50 per share."

In a letter to Everlast's board, Aquamarine accused management and the board of being "unusually quick" to sign merger agreements with break-up fees that make it more difficult and expensive for a potential higher bid to come through.

The investor encouraged the board "to slow down, step back, and go back to the negotiating table with Hidary Group to better understand the value of the roll-over structure to shareholders."

Everlast amended its definitive agreement with Brands Holdings Ltd., upping the offer price to $33 from $30. The company's board approved the all-cash transaction valued at $183 million.

Hidary is considering legal action against the company following its amended deal with Brands.

As previously reported, Everlast terminated its merger agreement with Hidary and paid a $3 million termination fee. Hidary had increased its bid to $30.55 per share "in a structure enabling all of the shareholders to roll up to 50% of their investment into the private company," Aquamarine stated in its letter. The investor objected to Everlast's failure to further negotiate with Hidary.

On June 4, Aquamarine said it would vote its 2.3% stake against Everlast's agreement to be acquired by Hidary for $26.50 per share, or about $146 million.

At that time, the investor believed Everlast to be worth closer to $50.00 per share.

Brands Holdings is a private company incorporated in England and Wales and a subsidiary of Sports Direct International plc, a publicly traded company listed on the London Stock Exchange.

New York-based Everlast designs, manufactures and markets boxing and fitness-related sporting goods equipment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.