American Greetings Corp. (AM) Chief Executive Officer Zev Weiss and his brothers raised their offer for the greeting-card maker for the third time after the stock rose above their previous bid and an investor opposed the deal.
The group, including Chairman Morry Weiss and Chief Operating Officer Jeffrey Weiss, increased the offer 4.4 percent to $19 a share in cash from $18.20 in April, according to a filing today. The new bid values the company at $551 million.
The Weiss brothers had made a proposal of $17.18 a share in September, saying that they wanted to return Cleveland-based American Greetings -- founded more than a century ago and publicly traded since 1958 -- to family ownership. TowerView LLC, a fund run by Daniel Tisch, rejected the deal even after the brothers raised the bid to $17.50 in January.
“The Special Committee asked us to reconsider the deal price in light of recent developments,” the Weiss group said today in a letter to American Greetings. “While we firmly believe that the $18.20 per share price is binding and remains fair, we have concluded that enhancing the price is the right thing to do.”
Through yesterday, the shares had increased as high as $18.48 after the raised bid in April, suggesting some investors anticipated a higher offer. Shares rose 5 percent to $19.01 at the close in New York.
TowerView, which controls 6.2 percent of American Greetings, reiterated in May that it wanted the deal’s financial adviser, Peter J. Solomon Co., to withdraw the claim that the offer was fair and had asked the two members of the special committee to change their recommendations.
“There is no reason at this point to permit the Weiss Family to take the company private,” TowerView said in its initial November letter. “All shareholders would be well served by continuing to use free cash flow to repurchase shares of common stock.”
American Greetings, the largest publicly traded greeting-card maker, sells cards under brand names such as Carlton Cards and Papyrus, as well as gift packaging, party goods and stationery. More than 80 percent of Americans, mainly women, buy greeting cards each year with the average customer in the mid-to late 40s, American Greetings has said.
Still the company, which competes with closely held Hallmark Cards Inc., has faced a shift in consumers’ habits as more people send cards by e-mails and fewer write letters. American Greetings responded by offering electronic cards and other services over the Internet and mobile devices.
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