Goody's Family Clothing Inc. and Affiliates of GMM Capital and Prentice Capital Enter Into a Definitive Agreement for the Acquis
28 October 2005 - 12:30AM
PR Newswire (US)
NEW YORK and KNOXVILLE, Tenn., Oct. 27 /PRNewswire-FirstCall/ --
Goody's Family Clothing, Inc. (NASDAQ:GDYS), GMM Capital LLC and
Prentice Capital Management, LP, today announced that they have
entered into a definitive agreement providing for affiliates of GMM
and Prentice to acquire Goody's for an all cash price of $9.60 per
share. About the Transaction Under the terms of the agreement,
affiliates of GMM and Prentice will commence a tender offer for all
of the issued and outstanding shares of common stock of Goody's
Family Clothing, Inc. for $9.60 per share. Consummation of the
tender offer is subject to certain terms and conditions, including
the tender of such number of shares, which together with the shares
beneficially owned by GMM and Prentice equal at least 51% of the
outstanding common stock, on a fully diluted basis. Subsequent to
the successful completion of the tender offer, any remaining shares
of Goody's common stock will be acquired in a cash merger at a
price of $9.60 per share. The merger agreement in the form executed
by affiliates of GMM and Prentice contains substantially the same
terms as are in the Agreement and Plan of Merger with certain
affiliates of Sun Capital Partners IV, dated October 7, 2005.
Robert M. Goodfriend, Chairman and Chief Executive Officer of
Goody's, members of his family and family trusts who beneficially
own an aggregate of approximately 42% of the outstanding shares
have agreed to tender their shares in the transaction. Mr.
Goodfriend and his family and related entities also granted an
option to affiliates of GMM and Prentice to acquire their shares at
the merger price of $9.60 per share. The option would be
exercisable for a 30-business-day period in the event that the
GMM/Prentice merger agreement is terminated as a result of a
Superior Proposal (as defined in the merger agreement) and under
certain other circumstances if Goody's terminates the merger
agreement. If such option were exercised, GMM and Prentice would
beneficially own an aggregate of approximately 48% of the
outstanding shares of common stock of Goody's, inclusive of shares
already owned by them. Consummation of the transaction is not
conditioned upon financing or due diligence. The Board of Directors
of Goody's has unanimously approved the transaction. Rothschild,
Inc. is providing financial advisory services to the Board. Goody's
had previously entered into an Agreement and Plan of Merger with
certain affiliates of Sun Capital Partners IV on October 7, 2005,
at a cash price of $8.00 per share. Goody's received an all cash
offer of $8.85 per share from GMM and Prentice on October 23, 2005
and its Board of Directors determined that such offer was a
Superior Proposal (as such term is defined in the Agreement and
Plan of Merger with the Sun Capital affiliates). As required under
the merger agreement with the Sun Capital affiliates, Goody's
provided four-business-day's notice to the Sun Capital affiliates
that it intended to terminate the merger agreement with the Sun
Capital affiliates at the close of business on October 27, 2005, on
the basis of its receipt of a Superior Proposal. During such
four-business-day period, Goody's was required to negotiate in good
faith with the Sun Capital affiliates with respect to a possible
revised proposal (unless Sun Capital affiliates elected to
terminate the merger agreement sooner or waived the
four-business-day period). Sun Capital provided written notice to
Goody's last night that it had terminated the merger agreement and
of its entitlement to the termination fee and expenses under the
merger agreement. Goody's Board subsequently approved a revised
proposal of $9.60 from Prentice and GMM after having received
another bid from a third party. Mr. Goodfriend commented, "We are
pleased that this transaction provides a price that represents a
20% premium over the agreement we had signed with Sun Capital. We
are proud that the well-respected GMM and Prentice organizations
recognized the value of the business we have built. I believe that
the lengthy and thoughtful process that our Board of Directors has
presided over helped us to maximize shareholder value. I wish to
thank all of the Goody's associates who have worked tirelessly to
help us achieve this result." Michael Zimmerman of Prentice Capital
commented, "We are excited about our acquisition of Goody's and its
highly respected organization. We look forward to applying the
combined experience of GMM Capital and Prentice Capital in
retailing to help the great Goody's franchise to realize its full
potential." About Goody's Family Clothing, Inc. Goody's,
headquartered in Knoxville, Tennessee, is a retailer of moderately
priced family apparel, and with the opening of two new stores on
October 20, 2005, and the temporary closure of five stores due to
hurricane damage, currently operates 371 stores in the 20 states of
Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa,
Kansas, Kentucky, Louisiana, Mississippi, Missouri, North Carolina,
Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West
Virginia. Additional Information The description contained herein
is neither an offer to purchase nor a solicitation of an offer to
sell shares of Goody's Family Clothing, Inc. At the time the tender
offer is commenced, affiliates of GMM and Prentice will file a
Tender Offer Statement and Goody's Family Clothing, Inc. will file
a Solicitation/Recommendation Statement with respect to the offer.
The Tender Offer Statement (including an offer to purchase, a
related letter of transmittal and other offer documents) and the
Solicitation/Recommendation Statement will contain important
information that should be read carefully before any decision is
made with respect to the offer. The offer to purchase, the related
letter of transmittal and certain other documents, as well as the
Solicitation/Recommendation Statement, will be made available to
all shareholders of Goody's Family Clothing, Inc., at no expense to
them. The Tender Offer Statement (including an offer to purchase, a
related letter of transmittal and other offer documents) and the
Solicitation/Recommendation Statement will also be available at no
charge at the SEC's website at http://www.sec.gov/. This press
release contains certain forward-looking statements which are based
upon current expectations relating to the expected timing and scope
of the acquisition and these statements involve material risks and
uncertainties including, but not limited to the satisfaction of the
conditions to closing of the tender offer, which include: (i) that
such number of shares are tendered, which, together with the shares
beneficially owned by GMM and Prentice, equal at least 51% of the
Company's fully diluted shares; (ii) that there be no event or
occurrence which would have a material adverse effect on the
Company; (iii) that there be no law, order or injunction that would
affect the ability of the parties to consummate the tender offer;
(iv) that there be no action by a governmental authority
challenging the transaction; (v) that the Company comply with its
covenants and not have breached its representations and warranties
(subject to applicable materiality qualifiers); and (vi) certain
other conditions to be met by the Company. Readers are cautioned
that any such forward-looking statement is not a guarantee of
future results and involves risks and uncertainties, and that
actual results and outcomes may differ materially from those
projected in the forward-looking statements. The Company does not
undertake to publicly update or revise its forward-looking
statements even if future changes make it clear that any projected
results or outcomes expressed or implied therein will not be
realized. The Company does not undertake to publicly update or
revise its forward-looking statements even if future changes make
it clear that any projected results or outcomes expressed or
implied therein will not be realized. Additional information on
risk factors that could potentially affect the Company's financial
results may be found in the Company's 2004 Annual Report on Form
10-K filed with the Securities and Exchange Commission and in
subsequent filings with the Securities and Exchange Commission.
Certain of such filings may be accessed through the Company's web
site, http://www.goodysonline.com/, then choose "SEC Filings."
DATASOURCE: Goody's Family Clothing, Inc. CONTACT: Edward R.
Carlin, Chief Financial Officer of Goody's Family Clothing, Inc.,
+1-865-966-2000 Web site: http://www.goodysonline.com/
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