NEW YORK (AP) ? Fashion designer Kenneth Cole is offering to pay about $148.5 million to buy the rest of Kenneth Cole Productions Inc., saying it would compete more effectively as a privately-held company.
Cole, who serves as chairman and chief creative officer, currently holds about 47 percent of the stock and approximately 89 percent of its voting power.
The offer disclosed Friday would give stockholders $15 per share in cash, a 15 percent premium to the company's Thursday closing price. The deal values the whole company at $280 million.
The company's stock rose above the offered price in premarket trading, climbing $2.63, or 20 percent, to $15.70 per share.
Cole said in a letter to the company's board that market challenges have created an increasingly competitive environment and that it is now important to take on a more entrepreneurial perspective to help develop the company's products, brands and business with a long-term approach.
"I believe it is increasingly difficult to develop this type of culture in a public company context, where the public markets are increasingly focused on short-term results. I am convinced that private ownership is in the best interests of the business and the organization and that this proposal is in the best interests of the shareholders," he said.
Cole also said he has no interest in selling his stake in the business and would not vote in favor of an alternative sale or similar transaction.
Cole said in the letter that he plans to invest all of the company's stock that he owns in the proposed deal. He expects to raise additional funds through committed financing from third-parties. Cole also stated that he won't move forward with the transaction unless it's approved by a special committee of independent directors.
The designer anticipates that the company's management and employees will remain after the transaction goes through.
The proposed deal is subject to the approval of the majority of shares not owned by Cole,
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