Outdoor financials: Luxottica to buy Oakley for $2.1 billion, plus Phoenix Footwear, Liz Claiborne, Payless/Stride Rite, Big 5, Liberty Media - SNEWS

Outdoor financials: Luxottica to buy Oakley for $2.1 billion, plus Phoenix Footwear, Liz Claiborne, Payless/Stride Rite, Big 5, Liberty Media

Luxottica to buy Oakley for $2.1 billion, Phoenix Footwear shares climb on sale of Royal Robbins, Prana-parent Liz Claiborne names new CFO, reorganizes company, Payless' buyout of Stride Rite OK'd by regulators, Big 5 shares fall after analyst cuts rating, and Liberty Media releases final results of tender offer.
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Luxottica to buy Oakley for $2.1 billion
Luxottica Group plans to acquire Oakley (NYSE: OO) for $2.1 billion, or $29.30 a share, in cash. Oakley's board said it will recommend the offer to shareholders for approval. The deal is expected to close in the second half of this year, pending normal closing conditions.

Jim Jannard, chairman and founder of Oakley, said in a statement: "Oakley's technology and performance is one of the world's best kept secrets and this partnership should empower our ability to tell our story throughout the world. Oakley will continue to be Oakley but with much greater resources and a platform for realizing the true potential of our brand and company."

In addition, the potential termination fees of the merger agreement between Luxottica and Oakley were disclosed. If Oakley's board of directors changes its recommendation, which includes backing a different offer for the company, then Oakley would pay Luxottica $69 million. But if the deal does not gain antitrust approval, Luxottica would pay Oakley $80 million.

Also, the filing said that Jannard has agreed to a five-year non-competition agreement at the closing of the merger.

Luxottica, based in Milan, Italy, has more than 5,800 optical and sun retail stores worldwide and makes eyewear under brands such as Ray-Ban and Chanel.

SNEWS® View: Once adversaries, now soon to be bed mates. This news does make sense from many perspectives, but is still somewhat surprising given the competitive animosity that embroiled the two companies through much of 2000 through 2005. Consider that in early 2000, Luxottica booted Oakley from its Sunglass Huts stores following the company's acquisition of the store chain. That move hammered Oakley's sales and financials. Order was somewhat restored in December 2001 when Luxottica and Oakley reached an agreement to reopen sales distribution through Sunglass Hut. Oh, and then there was a little matter of litigation over intellectual property infringement when Oakley sued Luxottica for selling unauthorized versions of the company's sunglasses in Sunglass Hut stores. That lawsuit was settled in 2003.

What changed the mood? New blood in upper management ranks for both companies seems to be the primary reason for the swords to be sheathed and negotiating doors opened. From the making sense angle, the acquisition means Oakley prescription sunglasses can now be sold through Luxottica's Lens Crafter stores. Oakley will give Luxottica a sales lift in the sports eyewear category. Luxottica, in turn, will certainly help Oakley with international sales growth.

Phoenix Footwear shares climb on sale of Royal Robbins
Shares of Phoenix Footwear Group (AMEX: PXG) shot up on June 19, a day after the company agreed to sell its Royal Robbins division to Kellwood Co. (NYSE: KWD) for $40 million in cash. Royal Robbins booked sales of $32 million in 2006.

Phoenix Footwear said it expects a net pre-tax gain of $23 million on the sale, including transaction costs. It said it anticipates the deal will close within the next 30 days.

In a conference call, Phoenix Footwear Chairman Jim Riedman said the sale will help the company pay down the majority of its debt.

On June 19, a day after the announcement, shares of Phoenix Footwear rose as high as $3.52, up $0.85 from the day before, then closed at $3.20. The stock -- which has traded between $1.38 and $6.09 during the past 52 weeks -- is down 39 percent year-to-date.

Prana-parent Liz Claiborne names new CFO, reorganizes company
Liz Claiborne (NYSE: LIZ), parent of Prana, named a new CFO, and said it would reorganize its business into two separate divisions in an effort to reduce costs and refocus on its brands.

The company appointed Andrew Warren to CFO, effective July 9. He will replace former CFO Michael Scarpa, who in late January was named as the company's chief operating officer.

Liz Claiborne said it will now operate via two divisions -- its retail-based direct brands division and a wholesale-based partnered brands division. The company called the move a "crucial step" in remaking Liz Claiborne into a more brand-focused and cost-effective business.

As part of the realignment, the company will eliminate the previous five group president positions. Jill Granoff, formerly group president, direct-to-consumer, will be executive vice president of direct brands and the company's outlet and e-commerce operations. Company President Trudy Sullivan will head the partnered brands division.

The reorganization is the latest attempt for the company to revitalize its brand, after six quarters of declining earnings. In May, the company said profit dropped 65 percent as department stores cut back on its poorer performing apparel lines. The company also issued a 2007 profit outlook that fell below analyst estimates.

In other company news: Liz Claiborne's board of directors declared a regular cash dividend on the company's Common Stock at the rate of $0.05625 per share to be paid on Sept. 17, 2007, to stockholders of record on Aug. 24, 2007.

Payless' buyout of Stride Rite OK'd by regulators
Federal antitrust regulators have approved Payless ShoeSource's (NYSE: PSS) proposed $800 million purchase of Stride Rite (NYSE: SRR). The government has completed its review and approved the transaction without conditions, according to a Federal Trade Commission notice. Stride Rite is the parent company of Saucony and Hind.

The acquisition, announced in May, combines Payless' chain of 4,600 shoe stores with Stride Rite's 300 stores and the higher-end brands that it owns or licenses, such as Keds, Saucony and Tommy Hilfiger Footwear.

Payless said that once the deal is completed, it would change its name to Collective Branding Inc., a holding company that will operate the Payless and Stride Rite chains separately.

The transaction is expected to close in the third quarter. Payless chief executive Matt Rubel has said the deal will add to the company's earnings this year.

Big 5 shares fall after analyst cuts rating
Shares of Big 5 Sporting Goods (Nasdaq: BGFV) declined on June 22, after an analyst said its stock is expensive given the possibility of weaker sales at its stores.

UBS Investment Research analyst Brian Nagel said in a note to clients that company management indicated that sales were below planned levels in April. "We believe weaker sales at the company to an extent reflect a softer macro environment in the Western U.S.," Nagel wrote. "All of Big 5's about 350 stores are located in the Western U.S., and more than half its units are located in California."

He cut his rating on the company to "Neutral," from "Buy" and left his price target unchanged at $28, saying that Big 5 is a "solid" company longer-term, but near-term shares could fall because the stock has risen 32 percent over the past 12 months, and the price doesn't reflect the potential for further sales weakness.

Big 5 shares fell $0.85 to close at $25.21 compared to the previous day. The stock has traded between $18 and $27.38 during the past 52 weeks.

Liberty Media releases final results of tender offer

Liberty Media Corp. (Nasdaq: LINTA), new parent of Backcountry.com, announced the final results of its modified dutch auction self-tender offer to purchase up to 19,417,476 shares of its Liberty Interactive Series A common stock at $24.95 per share.

Based on the final tabulation by the depositary for the tender offer, 27,543,660 shares were tendered. The depositary has advised Liberty that the final proration factor was approximately 70.3 percent for the tender offer. Any "odd lot" shares of Liberty Interactive Series A common stock properly tendered and not withdrawn will not be subject to proration.

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