Top 40 supplier American Apparel (asi/35297) confirmed yesterday that it has received a bid from an equity firm to purchase the company. American Apparel said the offer is for between $1.30 and $1.40 per share, which would represent a premium of at least 15% over the company’s closing stock price yesterday.
“The board takes these matters seriously, and it will evaluate this proposal in the ordinary course of business,” wrote American Apparel’s board of directors in a statement that was released yesterday morning and that confirmed the offer but did not name the bidder. “The company remains focused on positioning American Apparel for a successful turnaround.”
The buyout offer comes less than a week after American Apparel said that it had hired fashion industry veteran Paula Schneider as its news CEO and had officially severed ties with Dov Charney, the founder and former CEO of the company. Other media outlets, including initially The New York Post and then Bloomberg News and Fortune, reported that the offer is coming from New York-based private equity firm Irving Place Capital, which does have ties to Charney. However, Fortune reported late yesterday that if Irving Place’s bid to purchase American Apparel is accepted, it would not bring Charney back as CEO or give him a managerial role with the company. The report stated, though, that Charney could possibly serve in an advisory role for Irving Place and American Apparel.
The moves come as American Apparel is in a time of great change. In the same release that it confirmed the bid to acquire the company, American Apparel announced that Allan Mayer and David Danziger, co-chairmen of the board, have stepped down but will retain their seats on the board of directors. The company subsequently announced that board member Colleen Brown has been named chairperson of the board.
"It's time to focus on the work ahead of us and push this company to reach its full potential," Brown said. "This is a pivotal moment for American Apparel, and I believe the company is poised for a significant turnaround. It will be very rewarding to work with an executive of newly appointed CEO Paula Schneider's caliber, and I thank Allan and David for their diligent efforts as co-chairmen of the board."
American Apparel ranks as the 14th-largest supplier in the industry, after reporting 2013 North American ad specialty sales of $99.2 million, a 2.5% increase over the previous year.