Cherokee offers to buy Mossimo for $8.50 per share
18 Apr '06
3 min read
Leading brand Management Company Cherokee Inc:
-Financially superior proposal for Mossimo shareholders.
-Provides $6.00 in cash and $2.50 in Cherokee stock.
-Combined entity expected to report significantly higher cash flow and earnings.
-Creates short and long-term value for Mossimo and Cherokee shareholders.
Cherokee Inc proposed to acquire all the outstanding shares of Mossimo Inc for $8.50 per common share consisting of $6.00 per share in cash and $2.50 per share in stock. The proposal represents an 8.8 percent premium to Mossimo's closing share price of $7.81 on April 17, 2006, and a 13.3 percent premium to the Iconix Brand Group Proposal.
The proposal values Mossimo at approximately $135 million, and is superior to the previous Iconix proposal. Cherokee believes the transaction provides fair value to Mossimo's shareholders and would be immediately accretive to Cherokee's earnings per share.
The proposal has been unanimously approved by the Board of Directors of Cherokee and communicated to Mossimo Giannulli, Mossimo's Chairman of the Board and Co-Chief Executive Officer, and Edwin Lewis, Vice Chairman and Co-Chief Executive Officer. The text of the proposal letter delivered to Mossimo is included at the end of this press release.
Company believe Cherokee's proposal for Mossimo is superior to Iconix's and provides significant value to Mossimo's shareholders," said Russell J. Riopelle, Chief Financial Officer of Cherokee Inc.
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