MIAMI, United States — Apparel maker Perry Ellis International said on Tuesday it had ended talks to be bought by fashion accessories maker Randa, backing an offer by its second-largest shareholder and founder George Feldenkreis.
Perry Ellis said the decision was made after a major licensor refused to consent to Randa's acquisition of the company, sending its shares down 5.2 percent to $27.58 in early trading.
Randa had raised its offer by 90 cents to $28.90 per share earlier this month, valuing the company at nearly $460 million. It had, however, set a precondition that it would need to speak with the licensor before formalising any deal.
Randa's sweetened offer was aimed at scuttling Perry Ellis' previously agreed upon deal with Feldenkreis and was seen as superior as it was at a 5.1 percent premium to the founder's bid. Feldenkreis had offered to buy Perry Ellis for $27.50 per share, or $437 million.
"Based on communications received from the company's key inbound licensor, it became clear that the key inbound licensor precondition to the (Randa) proposal is not likely to be satisfied," a special committee formed by Perry Ellis to look into the proposals said in a statement on Monday, adding that Randa had also refused to waive the precondition.
"The Special Committee continues to believe that the Feldenkreis merger agreement is in the best interest of all Perry Ellis shareholders," they said.
Randa was not immediately available to comment.
By Vibhuti Sharma; Editor: Anil D'Silva.