A SWEET-GART OF A DEAL? GART MAKES UNSOLICITED BID FOR TSA
CO-based Gart Sports Co. has announced that it is
seeking a strategic combination with The Sports Authority
(TSA). Under terms of Gart's offer, holders of 70% of TSA's
shares outstanding would receive $20 per share in cash for
their shares, while the remaining 30% of TSA shares would
remain outstanding and would represent a 51% ownership
interest in the common stock of the combined company (Gart
Sports). In Denver, Penny Parker wrote that if TSA accepts
the offer, Gart will pay $445.2M in cash and assume
"roughly" $179M in debt. However, TSA is "already
entertaining" an offer from N.Y.-based Venator Group,
formerly Woolworth and the parent company of the Foot Locker
chain, for $16.70 a share. Gart CEO Doug Morton said his
company "thinks there are significant opportunities for
expense savings in advertising, corporate staff and systems.
We have talked to a lot of [TSA] shareholders ... and they
say they like this deal." Morton added that Gart stores and
TSA stores "overlapped in only a few" markets, including
Seattle, Sacramento and Chicago (DENVER POST, 7/3) In N.Y.,
Alexandro Bodipo-Memba reported that TSA would have to pay
Venator an $8.5M "break-up fee" if that deal falls through,
and said that Gart's proposal "is being reviewed" by its
investment bankers (WALL STREET JOURNAL, 7/6).
A VAIL OF A DEAL: Vail Resorts Inc. has agreed to merge
its retail operations with CO-based Specialty Sports, a ski
and golf equipment retailer. Vail Resorts will own a 52%
stake in the new company, which will be called Specialty
Sports venture LLC, and will have 70 stores with combined
revenue of $70M (WALL STREET JOURNAL, 7/7).
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