Calling Sun Capital Securities Group’s $21-a-share offer for Kellwood Co. “a handsome premium to shareholders at a fair valuation for the company,” institutional money manager Discovery Group has urged Kellwood’s board to negotiate in good faith with its suitor.
Discovery, which holds a 1.5 percent stake in Kellwood, said it currently intends to submit its 391,100 shares of Kellwood stock to the Sun offer.
“We strongly believe that the board must negotiate in good faith with Sun in order to strike the best possible transaction for all shareholders,” Michael Murphy, managing partner of Discovery, wrote in a letter to Kellwood’s board. “A negotiated transaction with board approval will be more expeditious and productive than a contested takeover.”
Discovery also urged Kellwood to rescind its poison pill “and any other defense mechanisms. By doing so, the board will allow shareholders to decide for themselves whether to accept Sun’s $21.00 or to maintain the status quo.”
On Tuesday, Kellwood advised shareholders not to act in response to Sun’s third acquisition offer and said its board would make a recommendation “in due course.”
For more, see Friday’s issue of WWD.