Randa Stays In Pursuit Of Perry Ellis Despite Early Rejection

Perry Ellis International, Inc. PERY rejected Randa Accessories’ unsolicited buyout bid last week, but Randa isn’t giving up.

What Happened

On Friday, Perry Ellis advised shareholders to vote against Randa’s deal and in favor of a $437-million take-private offer from founder George Feldenkreis.

“The [Randa] proposal is highly conditional, nonbinding and insufficient in terms of value and certainty of the provided debt financing commitments, as well as the lack of evidence of sufficient cash equity on hand,” Perry Ellis said in a press release.

The recommended transaction, which allegedly prohibits negotiations over competing proposals, would amount to $27.50 per share.

Randa issued a press release Monday stating it was “confident” Perry Ellis shareholders would see greater value in its $28-per-share bid and further defended its financing capabilities.

“We have previously provided executed financing commitments from world-class financial institutions, which, along with Randa's demonstrated financial capacity, are together more than sufficient to consummate our proposed transaction,” the company said. 

Why It’s Important

The Randa transaction is seen to provide shareholders more immediate cash value, and Randa said it would close sooner than the insider deal, particularly as it would undergo less regulatory scrutiny.

“We hope that the Special Committee will quickly reach the unavoidable conclusion that our proposal is reasonably expected to lead to a superior proposal,” the potential buyer said. 

What’s Next

Perry Ellis confirmed Friday that the Feldenkreis transaction was expected to close in the second half of the year.

Randa said it would not abandon its pursuit of Perry Ellis and remains ready to negotiate.

“We remain committed to pursuing a mutually beneficial transaction that will provide your shareholders with maximum value."

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