NEW YORK, June 6, 2012 /PRNewswire/ -- Kenneth Cole
Productions, Inc. (NYSE: KCP) (the "Company") announced
that it has entered into a definitive merger agreement under which
Kenneth D. Cole, Chairman and Chief Creative Officer of the
Company and the beneficial holder of approximately 46% of the
Company's outstanding common stock (representing approximately 89%
of the voting power), will acquire the Company through KCP Holdco,
Inc., an entity he controls that was formed for the purposes of the
acquisition.
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Under the agreement, the Company's shareholders, excluding Mr.
Cole and his affiliated entities, will receive $15.25 per share in cash upon completion of
the transaction. The price represents a premium of 17% to the
closing price of the Company's shares on February 23, 2012, the last trading day before
the announcement by Mr. Cole of his proposal, and a premium of 28%
over the average closing price of the Company's Class A common
stock for the 45 trading days prior to that date, and implies a
total enterprise value of approximately $245
million.
A special committee of the board of directors, comprised of all
of the directors of the Company other than Kenneth Cole and Paul
Blum, was formed in February
2012 to review the proposal from Mr. Cole, with the
assistance of independent legal and financial advisors. The
special committee completed a thorough review of the proposal,
considered alternatives, and unanimously concluded that the
transaction with Mr. Cole was in the best interests of the
Company's shareholders other than Mr. Cole and his affiliates and
associates. Based on the unanimous recommendation of the special
committee, the agreement was also approved by the full board other
than Mr. Cole, who abstained.
Completion of the transaction is subject to certain closing
conditions, including receipt of shareholder approval and other
customary conditions. The merger agreement contains a non-waivable
condition that a majority of the outstanding shares of the Company
not owned by Mr. Cole and his affiliates and associates vote in
favor of the adoption of the merger agreement.
In addition, Wells Fargo Bank, N.A., part of Wells Fargo &
Company (NYSE: WFC), and certain other parties have entered into a
binding commitment letter to provide debt financing in the event
the closing conditions have been met, and Cole Family Holdco, LLC,
an entity formed by Mr. Cole, and another third party have entered
into binding commitment letters to provide equity financing in the
event the closing conditions have been met.
BofA Merrill Lynch is acting as financial advisor to the special
committee, and Sidley Austin LLP is acting as legal advisor to the
special committee.
Peter J. Solomon Company is acting as financial advisor to Mr.
Cole, and Willkie Farr &
Gallagher LLP is acting as legal advisor to Mr. Cole.
About Kenneth Cole Productions, Inc.
Kenneth Cole Productions, Inc. designs, sources, and markets a
broad range of footwear, handbags, apparel and accessories under
the brand names Kenneth Cole New York; Kenneth
Cole Reaction; and Unlisted, as well as footwear
under the proprietary trademark Gentle Souls. The
Company has also granted a wide variety of third party licenses for
the production of men's, women's and children's apparel as well as
fragrances, watches, jewelry, eyewear, and several other accessory
categories. The Company's products are distributed through
department stores, better specialty stores, company-owned retail
stores and its e-commerce website. Further information can be
found at http://www.kennethcole.com.
Additional Information and Where to Find It
This communication may be deemed to be solicitation
material in respect of the proposed acquisition of the Company by
KCP Holdco, Inc. In connection with the transaction, the Company
will file a proxy statement and file or furnish other relevant
materials with the Securities and Exchange Commission, or SEC.
SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY ALL
RELEVANT MATERIALS FILED OR FURNISHED WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING THE PROXY STATEMENT WHEN IT IS
AVAILABLE, BECAUSE THESE MATERIALS WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Shareholders will be
able to obtain a free copy of the proxy statement when available
and other relevant documents filed with the SEC from the SEC's
website at www.sec.gov, or by directing a request by mail to
Kenneth Cole Productions, Inc., 603 West 50th Street, New York, NY 10019, or from the Company's
website at http://www.kennethcole.com. The contents of the
websites referenced above are not deemed to be incorporated by
reference into the proxy statement.
Participants in Solicitation
The Company and certain of its directors, officers and
other members of management may, under the rules of the SEC, be
deemed to be "participants" in the solicitation of proxies from its
shareholders that will occur in connection with the transaction.
Information concerning the interests of the persons who may be
considered "participants" in the solicitation is set forth in the
Company's proxy statements and Annual Reports on Form 10-K
previously filed with the SEC, and will be set forth in the proxy
statement relating to the transaction when the proxy statement
becomes available. Copies of these documents can be obtained,
without charge, at the SEC's website at http://www.sec.gov, by
directing a request to the Company at the address above, or at
http://www.kennethcole.com.
Forward Looking Statement Disclosure
The statements contained in this release that are not
historical facts may be deemed to constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Actual future results might differ
materially from those projected in such statements due to a number
of risks and uncertainties, including but not limited to those
mentioned above, demand and competition for the Company's products,
the ability to enter into new product license agreements or to
renew or replace existing product licensee agreements, changes in
consumer preferences or fashion trends, delays in anticipated store
openings, and changes in the Company's relationships with
retailers, licensees, vendors and other resources. The
forward looking statements contained herein are also subject to
other risks and uncertainties that are described in the Company's
reports and registration statements filed with the Securities
and Exchange Commission, including without limitation the risk
factors described in Item 1A of the Company's most recent annual
report on Form 10-K filed on March 9, 2012.
SOURCE Kenneth Cole Productions, Inc.