Saucony shareholders vote in favor of sale to Stride Rite
At a special meeting of shareholders on Sept. 16, Saucony (Nasdaq: SCNYA and SCNYB) shareholders voted "overwhelmingly" to adopt the merger agreement under which The Stride Rite Corp. (NYSE: SRR) will acquire Saucony. Approximately 86 percent of the Saucony's Class A Common Stock and approximately 82 percent of the its Class A Common Stock and Class B Common Stock, voting together as a single class, approved the merger agreement, which closed on Friday.
Saucony and Stride Rite entered into a definitive agreement on June 2, under which Stride Rite agreed to pay $23 in cash for each outstanding share of Saucony Class A and Class B common stock, or approximately $172 million in aggregate value. The acquisition is being financed with cash on hand and borrowings under a new $200 million revolving credit facility led by Bank of America, N.A.
Saucony brings to Stride Rite the Saucony, Hind and Spot-bilt brands, which generated $167 million in revenue in 2004. The acquisition expands Stride Rite's portfolio of nationally recognized footwear brands, and is expected to be accretive to Stride Rite's earnings starting in 2006.
"This is an exciting day for both Stride Rite and Saucony," said David M. Chamberlain, Stride Rite's chairman and CEO. "The addition of Saucony to our portfolio of nationally recognized footwear brands provides us with a well-known technical athletic brand with loyal customers and solid growth prospects. We welcome the employees and business partners of Saucony to the Stride Rite family. This transaction combines two leading footwear companies with strong balance sheets and cash flows, similar corporate cultures, and shared roots in the greater Boston area dating back to the early 1900s."
Chestnut Securities, Inc. and Wilmer Cutler Pickering Hale and Dorr LLP served as financial advisor and legal counsel, respectively, in connection with the transaction.
Rocky ramps up public offering
Rocky Shoes & Boots (Nasdaq: RCKY) filed for a proposed public offering of 2.6 million common shares with the Securities and Exchange Commission. The company said it will sell 2 million shares and 600,000 shares will be offered by certain selling shareholders. Underwriters have been granted a 30-day option to purchase up to 390,000 added shares to cover over-allotments, if any. The managing underwriters of the offering will be Piper Jaffray & Co., with co-managers Wachovia Securities, BB&T Capital Markets, D.A. Davidson & Co., and Ryan, Beck & Co.
Sport Chalet execs to sell Class A shares to repay loans
Sport Chalet (Nasdaq: SPCH) executivesÂ -- CEO Craig Lavra, CFO Howard Kaminsky and Executive VP Dennis Trausch -- have adopted a stock trading plan to sell shares of their Class A common stock.
Trausch's plan starts on Sept. 15, while Levra and Kaminsky's plans go into effect Oct. 3.
They are subject to certain price restrictions and other contingencies established in the plans. Levra is selling 90,000 shares, Kaminsky, 70,000, and Trausch, 7,500.
They are selling shares to raise funds to repay loans, which were used to pay the exercise price and tax withholding obligations from the exercise of options, a statement said. In addition, Levra's and Kaminsky's loans also include the payment of additional tax obligations from the proposed transfer of Class B shares from the Olberz Family Trust following completion of the previously announced recapitalization plan.
The plans, effective for a term of four months, will allow Levra, Kaminskyand Trausch to sell shares of common stock through Wedbush Morgan Securities during the term.
West Marine stock drops 10 percent after lowered yearly forecast
After slashing its full year guidance, West Marine (NasdaqNM: WMAR) was downgraded by BB&T Capital Markets and saw its stock drop by more than 10 percent.
The retailer reduced its full-year earnings forecast to a range of $0.70 to $0.75 per share from $0.95 to $1 per share. The company's profit outlook had ranged as high as $1.10 to $1.15 per share earlier this year, but declining sales have continually prompted guidance reductions. Its same-store sales have also been on the decline since last year.
West Marine said Hurricane Katrina destroyed four stores on the Gulf Coast and damaged nine others, although those are operating. It added that rising gas prices have also weakened customer demand and made it more costly to ship merchandise.
BB&T Capital Markets downgraded the stock to "hold" from "buy" and shaved its earnings estimates to account for the company's predicted shortfall. It lowered third-quarter earnings estimate to $0.16 from $0.33 per share and fourth-quarter forecast to a wider loss of $0.21 from a $0.15 loss. For the year, BB&T reduced the income estimate to $0.75 from $0.98 per share.
Shares of West Marine plummeted $1.84, or 10 percent, to $16.22 in midday trading on the Nasdaq, after losing as much as 12 percent earlier in the day. The stock is down about 35 percent since January, after reaching a 52-week high of $27.15 in February and diving to $15.11 in April.
Wolverine names new board member
Wolverine World Wide (NYSE: WWW), parent of Merrell, has appointed Michael A. Volkema to the company's board of directors. His term will begin on Dec. 1. Volkema is the chairman of Herman Miller, Inc., a designer and manufacturer of furnishings for the office and home. Volkema has held senior management positions with Herman Miller since 1990 when the company acquired Meridian, Inc., where he was president and COO. Volkema became president and CEO of Herman Miller in 1995, and has been chairman since 2000. He is also a director of Applebee's International, Inc.
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