American Apparel Receives Bid to Buy the Company
The up and down saga at American Apparel just took another turn.
On Dec. 22, the board of directors said in a press release that it received a bid to acquire the Los Angeles clothing company for $1.30 to $1.40 a share. As of Dec. 23, the stock was trading at around $1.05 a share, almost double what it was trading for last week.
The previous day, the board enacted a one-year stockholder rights plan, or “poison pill,” to prevent a takeover attempt by anyone who attempts to purchase more than 10 percent of the company’s stock or 0.1 percent of outstanding shares if they already own 10 percent of stock.
The press release did not state who had made the offer, but many suspected that ousted chief executive Dov Charney was behind the move along with Irving Place Capital. He and hedge fund Standard General currently control about 44 percent of the stock.
Charney was fired from his job on Dec. 16 after the board finished its investigation into alleged misconduct on his part.
He is being replaced by Paula Schneider, a veteran clothing industry executive who has led companies such as Laundry by Shelli Segal and Speedo swimwear. In documents filed with the Securities and Exchange Commission, Schneider’s base salary was listed as $600,000 plus other benefits if certain targets are met. Schneider begins her CEO job on Jan. 5.
Meanwhile, a new chairman of the board has been appointed. Colleen Brown, who was appointed to the board in August, is the new head of the board. Co-chairmen Allan Mayer and David Danziger are stepping down from the top spot but will remain on the board.
“It’s time to focus on the work ahead of us and push this company to reach its full potential,” Brown said.
Two promotions of long-term employees were also announced. Patricia Honda has been named president of wholesale and Nicolle Gabbay is president of retail.
