Kellwood’s board clears way for Sun Capital takeover

Kellwood Co. is going to let its shareholders decide the fate of the company.

While taking no position on the bid, the Town and Country-based clothing maker and marketer on Sunday said it intends to remove all impediments to the takeover offer made by Sun Capital Securities Group. As part of its announcement, Kellwood said it will remove a provision aimed at stopping hostile takeovers and would end its plan to buy back as much as $60 million worth of debt. 

Kellwood shares rose 19 percent to close at $20.30, up $3.20 on the New York Stock Exchange.

“While it is our strong preference to continue as an independent company, we believe that stockholders should be able to make their own decisions on a $21 per share cash offer that is not subject to due diligence or financing,” Robert C. Skinner, Jr., Kellwood’s chairman, president and chief executive officer, said in a news release.

Kellwood’s board had previously turned down the $21 a share offer, saying it undervalued the company and recommended that shareholders not accept the offer.

Sun Capital is an affiliate of Sun Capital Partners, a Boca Raton, Fla.-based private investment firm that focuses on leveraged buyouts and investments in market-leading companies. 

“We are pleased that Kellwood’s Board intends to allow stockholders to decide for themselves on Sun Capital’s $21 per share cash tender offer and we also support Kellwood’s decision to terminate its previously announced debt tender,” Jason Bernzwig, Sun Capital vice president, said in a statement.

Kellwood set a Feb. 12 deadline for Sun Capital to acquire enough shareholder support to carry out the takeover.

Kellwood also has asked its financial advisors, Banc of America Securities LLC and Morgan Stanley & Co., to seek an alternative offers.