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Acquisitions and Dispositions
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9 Months Ended |
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Apr. 28, 2012
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| Acquisitions and Dispositions | 5. Acquisitions and Dispositions
Charming Shoppes Acquisition
On May 1, 2012, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) with Charming Shoppes, Inc. (“Charming Shoppes”), which owns and operates multiple retail brands through over 1,800 retail stores and e-commerce including: Lane Bryant; Catherines; Fashion Bug; and Figi’s. On May 15, 2012, the Company commenced a cash tender offer for all the outstanding shares of Charming Shoppes common stock at $7.35 per share, for an aggregate purchase price of approximately $890 million (collectively, the “Charming Shoppes Acquisition”). The acquisition is expected to be funded with $475 million from new debt borrowings, available cash and equivalents and the liquidation of substantially all of the Company’s investment portfolio.
The acquisition is subject to customary conditions and approvals, including that holders of a minimum of a majority of the fully diluted shares of Charming Shoppes tender, and do not withdraw, their shares prior to expiration of the tender offer. In the event a majority, but not 80%, of Charming Shoppes’ fully diluted shares are tendered, the Company will have the option to acquire additional, newly issued shares of Charming Shoppes such that, after giving effect to the exercise of the option, the Company will own more than 80% of the outstanding shares. This will enable the Company to merge its acquisition subsidiary into Charming Shoppes in a short-form merger that will not require any further vote of shareholders. In addition, the Merger Agreement contains certain termination rights for both the Company and Charming Shoppes, including the termination of the Merger Agreement by Charming Shoppes, in which case Charming Shoppes would be required to pay the Company $30 million.
The transaction is expected to close in mid-June 2012. Acquisition-related costs of $6.8 million were expensed as incurred during the third quarter of Fiscal 2012, and are reported separately in the consolidated statements of operations. |