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Perry Ellis agrees to founder's $437M takeover proposal

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Perry Ellis agrees to founder's $437M takeover proposal

Apparel retailer Perry Ellis International Inc. will become a private company after its board unanimously agreed to be acquired by its founder, George Feldenkreis, for $437 million.

A newly formed entity controlled by Feldenkreis will acquire all outstanding common shares of Perry Ellis not already beneficially owned by his family for $27.50 per share in cash, according to a June 16 news release. The purchase price represents a premium of approximately 21.6% to Perry Ellis' closing stock price Feb. 5, the last trading day before Feldenkreis announced his proposal to take the company private.

Perry Ellis shares closed trading June 15 at $27.97, up 0.87% on the day on about triple average volume.

The transaction will be financed through a senior secured asset-backed revolving loan facility underwritten by Wells Fargo Bank NA, a $282 million multi-tranche term financing facility provided by Fortress Credit Advisors LLC, and equity provided by the Feldenkreis family.

Taking Perry Ellis private will help the company make investments in digital innovation, artificial intelligence and marketing, Feldenkreis said. He was removed as executive chairman Sept. 20, 2017, but continues to have a seat on the board.

The transaction is expected to complete in the second half of this year, subject to customary closing conditions and approvals, including by regulators and Perry Ellis shareholders. Feldenkreis will return to play an active role in managing the company, while his son, Oscar Feldenkreis, will continue as CEO following completion of the transaction.

The company agreed to defer its next annual meeting to elect board directors while the transaction is pending.

PJ Solomon is serving as financial adviser to the special committee of independent directors that evaluated the takeover proposal, while Paul Weiss Rifkind Wharton & Garrison LLP and Akerman LLP are serving as the committee's legal counsel. Innisfree M&A Inc. is serving as the company's proxy solicitor.

Scope Advisors LLC is serving as financial adviser to the group led by George Feldenkreis, with Olshan Frome Wolosky LLP and Proskauer Rose LLP serving as legal adviser. Stearns Weaver Miller Weissler Alhadeff & Sitterson is serving as legal counsel to Oscar Feldenkreis. Kirkland & Ellis LLP is serving as legal adviser to Fortress Credit Advisors and its affiliates.