Kenneth Cole to Take Company Private
Kenneth Cole Productions Inc. (KCP) shares topped the $15 price the company’s founder offered to take the shoe and clothing maker private, signaling investors may be anticipating other bids.
The shares advanced 19 percent to $15.49 at the close in New York, for the highest closing price since October 2010. The stock has increased 46 percent this year.
Kenneth Cole, who holds 47 percent of Kenneth Cole Productions shares outstanding, offered to buy the remaining stake today in a deal that valued the business at $280 million. That’s 15 percent more that yesterday’s closing price.
“Kenneth has made it clear that he doesn’t want to work for anybody -- he’s a trailblazer, which is going to scare off potential bidders,” Steven Marotta, an analyst at CL King & Associates in Albany, New York, said today in a telephone interview. “He is essentially bidding against himself but the deal is probably going to get done at a higher level.”
Cole, who is chairman and chief creative officer, started the company in New York in 1982 with a focus on shoes. The clothing and accessory line is now carried in U.S. department store chains. He currently holds 89 percent voting power.
“The other question is whether the shareholders will take it, and I’m guessing they will, just at a higher price,” Marotta said.
Cole said in a statement today that he intends to keep current management in place. He appointed legal adviser Willkie Farr & Gallagher LLP.
“Recent market challenges have created a sharply competitive landscape, and I believe it is now more important than ever to embrace a more entrepreneurial perspective where we are all incentivized to grow and develop our company’s products, brand and business with a longer term perspective,” Cole said in the statement.
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