By a News Reporter-Staff News Editor at Investment Weekly News -- Accessories marketer R.G. Barry Corporation (Nasdaq: DFZ) andMill Road Capital, a private equity firm, announced the signing of a merger agreement pursuant to which Mill Road will acquire all of the outstanding shares of R.G. Barry Corporation for $19.00 per share in cash, reflecting an equity value of approximately $215 million. The merger will result in R.G. Barry becoming a wholly-owned subsidiary of a newly-formed corporation controlled by Mill Road.
The $19.00 per share cash merger price represents a premium of 18% compared to the 30-day average price of the stock prior to the announcement of Mill Road's initial proposal on September 11, 2013, and is 67% higher than the 52-week low and 6% higher than the 52-week high, prior to the announcement.
The R.G. Barry Board of Directors unanimously approved the merger agreement and the merger, consummation of which is subject to customary closing conditions, including adoption of the merger agreement by R.G. Barry's shareholders and the expiration of the waiting period or other approval under the Hart-Scott-Rodino Antitrust Improvements Act. Concurrently with entering into the merger agreement, Mill Road also entered into a voting agreement to vote its 9.8% stake in R.G. Barry in favor of the transaction. The merger is expected to close during the third calendar quarter of 2014, barring unforeseen circumstances and assuming that no other bidders present themselves.
"After careful consideration, the Board of Directors believes the merger serves the best interests of R.G. Barry and its shareholders," said Lead Director David Lauer.
Greg Tunney, R.G. Barry chief executive officer and president, added, "Mill Road has a clear understanding of our vision for the business. As a privately-held company, we expect to continue to invest in the long-term growth and acquisition strategies that we believe will propel RG Barry Brands into a true leader in the accessories marketplace. We look forward to this partnership."
Scott Scharfman, Managing Director of Mill Road added, "We have been a shareholder of R.G. Barry for many years and are pleased to increase our existing 9.8% stake in this great company. We have great confidence in the outstanding senior management team led by Greg Tunney and believe in their ability to successfully implement the long term strategic plan."
The merger agreement permits R.G. Barry to solicit alternative acquisition proposals from third parties through May 31, 2014, and R.G. Barry intends to do so under the direction of the Board and with the assistance of its financial advisor.
R.G. Barry is being advised by Peter J. Solomon Company, L.P., its financial advisor, and Vorys, Sater, Seymour and Pease LLP, its legal counsel. Mill Road is being advised by Foley Hoag LLP, its legal counsel.
R.G. Barry also announced that its Board of Directors, as required by the merger agreement, has suspended the payment of the regular quarterly dividend so long as the merger agreement is in effect.
Third Quarter and Year-to-Date Results
The Company also reported operating results for its fiscal 2014 third quarter and nine months, ended March 29.
Keywords for this news article include: Mergers, Acquisitions, Investment and Finance, R.G. Barry Corporation.
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