The Los Angeles retailer said the offer was for $1.30 to $1.40 a share. A bid at the high end of that range would represent a 31 percent premium over American Apparel’s closing price Friday.
“The Board takes these matters seriously, and it will evaluate this proposal in the ordinary course of business,” the company said in a statement.
Although the bidder was not disclosed, Bloomberg reported last week that private equity firm Irving Place Capital was interested in making an offer in that range and bringing back Dov Charney, the founder who was fired last week for inappropriate conduct including misuse of company apartments and improper behavior with employees.
The takeover interest signals yet another chapter in a dramatic six months for the company after its board ousted Charney as chairman and suspended him as chief executive in June.
To protect itself from unwanted suitors, American Apparel said Sunday it had adopted a shareholder rights plan.
Under the so-called poison pill, any person or group that acquires more than a 10 percent stake in American Apparel common stock will be deemed an “acquiring person.” Any person or group that already owns 10 percent or more of stock will be dubbed an acquiring person only if they buy an additional 0.1 percent of stock.
If that happens, existing stockholders will be able to buy additional stock in the company for $3.25 a share. In the event of a takeover, stockholders will also be entitled to receive common stock in the purchasing company at a value that is equal to twice the exercise price of the right (at this point, $3.25).
“The rights plan is designed to limit the ability of any person or group to seize control of the company without appropriately compensating all American Apparel stockholders,” the company said.
American Apparel adopted a similar poison pill plan in June to prevent Charney from regaining control of the company.
Charney ultimately tethered his shares to New York investment firm Standard General in an effort to take back American Apparel. Their combined stake is nearly 44 percent, although Standard General effectively controls those shares. The hedge fund pushed for a board shakeup earlier this year, which prompted Charney to resign as a director.
Also on Monday, the retailer said that co-chairmen David Danziger and Allan Mayer have stepped down from that position but will remain on the board. Colleen Brown, who joined the board in August, will become the new chairwoman.
The board shakeup comes after the company appointed Paula Schneider, a longtime retail executive, to the position of CEO last week.
American Apparel shares climbed 4 cents, or 3.7 percent, to $1.11.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
