Dick's Sporting Goods Inc and Golf Galaxy Inc have entered into a definitive agreement and plan of merger whereby Dick's will acquire Golf Galaxy.
Under the terms of the agreement, each outstanding share of Golf Galaxy common stock will be converted into the right to receive $18.82 per share in cash, without interest.
The Merger Agreement also provides for the assumption of outstanding employee stock options and warrants of Golf Galaxy, except that, the holders of vested in-the-money options and warrants will be permitted to elect to cash out such options and warrants.
The Merger Agreement contains a provision related to limited solicitation of third-party proposals and a customary fiduciary out for unsolicited proposals.
Dick's offer represents a premium of 19 percent over Golf Galaxy's closing stock price as of November 10, 2006. Based on approximately 11.7 million outstanding Golf Galaxy shares, the transaction would be valued at approximately $225 million. The transaction will be financed using Dick's existing credit facility.
Completion of the transaction is contingent upon various conditions, which are more fully set forth in the merger agreement, and includes, among other things, approval of the transaction by Golf Galaxy's shareholders.
The merger transaction is anticipated to be completed not before February 6, 2007, subject to Hart-Scott-Rodino approval under United States antitrust laws and customary closingconditions.
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