Women’s Wear Daily
04.23.2014
financial
financial

Chasing Tommy: Apax and PVH Said in Lead, but Price an Issue

Apax Partners, in partnership with Phillips-Van Heusen, is in the lead in the bid for Tommy Hilfiger Corp., but the process is said to be "fluid."

financial/news
Tommy Hilfiger

Tommy Hilfiger

Photo By WWD Staff

NEW YORK — Apax Partners LLC and Phillips-Van Heusen are said to be the lead contenders in the bidding for Tommy Hilfiger Corp. But a price tag is proving difficult to nail down.

As a result, the bidding, which was due to close on Friday, could continue even beyond next week, according to several sources in the banking community. Sun Capital and Perry Capital are other names that have popped up as contenders in the bidding for Hilfiger. Both are financial players with large war chests.

The current bid ranges between $1.68 billion and $1.78 billion, which is below the $2 billion the Tommy Hilfiger board is said to want, according to financial sources. Officials at Tommy Hilfiger declined comment Monday.

The nature of the bidding process is driven by several factors, including the potential to hook up sourcing and licensing deals as well as financing an acquisition. One financial source said, "The whole thing is a moving target, with multiple parts. Just because Apax is in the lead now doesn't mean it will remain in the lead at the end of the day when bids are finally submitted."

Another financial source said, "The process is very fluid. It all changes each minute."

Still, financial sources said the bidding is likely to be locked in a specific range. Banking sources said the players are looking at a price tag of $15.50 to $16 per share, which excludes $177 million in cash that Tommy Hilfiger Corp. has on its books. Sources also said there's a possibility that potential financial buyers are acting like "Scrooge," unwilling to stretch to a price tag of $17 per share.

Shares of Tommy Hilfiger closed Monday at $17.75.

One banker involved in the bidding said Tommy Hilfiger Corp. will not accept less than its market capitalization value. Monday's close at $17.75 per share pegs the market cap at $1.64 billion. At a $16-a-share bid, the purchase price would be $1.5 billion.

When including the $177 million in cash, the total purchase price would be $1.68 billion. Since a buyer would keep the cash, and use it to finance the purchase, the effective price tag is $1.5 billion. That $1.5 billion is far below the $2.1 billion the company and some bankers thought it might get when the story of the sale first broke on WWD's Web site on Aug. 17.

Page:  Next »
VIEW ARTICLE IN ONE PAGE
load comments

ADD A COMMENT

Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.

Ads by Google

Newsletters
Newsletters

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

Publications

ArticleFinder

Beauty


Choose By

Clear

How it works

Close

Lorem Ipsum
Dolor sit amet, consectetur adipiscing elit. Vivamus ac nibh et risus lobortis scelerisque tempor nec enim. Etiam facilisis sapien sit amet.

Lorem Ipsum
Dolor sit amet, consectetur adipiscing elit. Vivamus ac nibh et risus lobortis scelerisque tempor nec enim. Etiam facilisis sapien sit amet.

Lorem Ipsum
Dolor sit amet, consectetur adipiscing elit. Vivamus ac nibh et risus lobortis scelerisque tempor nec enim. Etiam facilisis sapien sit amet.

Lorem Ipsum
Dolor sit amet, consectetur adipiscing elit. Vivamus ac nibh et risus lobortis scelerisque tempor nec enim. Etiam facilisis sapien sit amet.

Lorem Ipsum
Dolor sit amet, consectetur adipiscing elit. Vivamus ac nibh et risus lobortis scelerisque tempor nec enim. Etiam facilisis sapien sit amet.


Or