Pickerington, OH—A week after R.G. Barry Corp. announced positive fourth quarter and full fiscal 2013 results, the footwear and accessories company, which has been looking to acquire company, finds itself the target for takeover.
Mill Road Capital, a private investment firm, has offered to take R.G. Barry private for $228.4 million, a $20-a-share offer that’s a 24% premium over the $16.17 average closing price of its stock in the past 30 days.
In a letter filed Wednesday with the SEC, Mill Road, which already holds an 8.57% stake in R.G.Barry, said it believed R.G. Barry would be better able “to realize its full potential as a private entity.”
Company Rejected Previous Offer in 2009
“Despite the company’s many strengths, we think the public market will never accord a high valuation to R.G. Barry. It is a small company with limited opportunities to gain market share in a very low growth core market,” Mill Road said.
In its second quarter report released last week, R.B. Barry, which owns Dearfoams, Foot Petals and baggallini, said company was successfully transforming from a “single-seasoned footwear company into a multidimensional, branded accessory business.”
Moreover, CEO Greg Tunney added that “our next growth milestone of becoming a $200-to-$250 million company in 3-to-5 years can and will be achieved.”
R.G. Barry posted a $13.3 million profit on revenue of $147 million for the year ended June 30, which was down from the previous year.
Mill Road reportedly is “highly impressed” with the company, its management and Tunney but plans to grow the business by further acquisitions would result in higher regulatory costs and expenses since R.G. Barry is publicly traded.
This is reportedly Mill Road’s second offer to take R.G. Barry private. The company rejected a $77.8 million offer Mill Road first made in 2009.
Commenting on the offer, “The Board of Directors of R. G. Barry intends to evaluate the proposal in a timely manner, but has not determined a definitive time frame for its evaluation.” No further comment would be made about the offer, the company added.
News of Mill Road’s offer boosted R.G. Barry’s stock price 13.6% in trading Wednesday.