Maxwell Shoe (NASDAQ:MAXS)
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Jones Apparel Group, Inc. Proposes to Purchase Maxwell Shoe Company Inc. For $20
Per Share In Cash
* Provides Attractive Premium to Maxwell Shoe Shareholders * Strategically
Complements Jones Apparel's Existing Footwear Business * Consolidates the
Highly-Recognizable AK Anne Klein Apparel and Footwear Brands
NEW YORK, Feb. 25 /PRNewswire-FirstCall/ -- Jones Apparel Group, Inc. today
announced that it has made an all-cash proposal to Maxwell Shoe Company Inc. to
purchase 100% of Maxwell's outstanding common stock for $20 per share, or an
aggregate equity value of approximately $300 million.
Peter Boneparth, Chief Executive Officer, stated, "Maxwell's portfolio of
footwear brands, which includes AK Anne Klein, targets price points from
moderatethrough bridge categories, and provides a perfect complement to our
existing footwear business. We also believe there are many strategic benefits
to consolidating our AK Anne Klein apparel business with Maxwell's AK Anne Klein
footwear business. In addition, this transaction would further broaden our
footwear brand portfolio and leverage the infrastructure of our footwear
business, creating compelling long-term strategic and financial benefits for our
shareholders."
AK Anne Klein footwear is underlicense from Jones Apparel as a result of
Jones's acquisition of Kasper A.S.L., Ltd. on December 1, 2003.
Mr. Boneparth continued, "The management team of Maxwell Shoe Company has done a
wonderful job in building a business, with approximately $225 million in annual
net revenues. Our decision to make this proposal represents the continuation of
a cooperative dialogue that began during the last quarter of 2003. We believe
this is a fair and well-priced proposal that represents an historic high for the
stock and significant value for Maxwell Shoe shareholders. We look forward to
working constructively with Maxwell's board and management to promptly conclude
this transaction."
Wesley Card, Chief Operating and Financial Officer, commented, "This transaction
meets all of our disciplined acquisition criteria, which include:
highly-recognizable brands, diversified distribution channels, excellent
management team, and strong financial metrics. We believe our proposal is
fairly valued, especially considering Maxwell's large cash position. We
anticipate this acquisition to be accretive to our financial results during its
first full fiscal year as part of Jones Apparel. It is premature to comment on
its impact to our 2004 results given the many uncertainties surrounding timing,
non-cash purchase accounting charges and potential non-recurring items. Our
strong financial position and liquidity allows us to make this proposal on an
all-cash basis."
Attached is the full text of the letter delivered earlier today to Mark J.
Cocozza, Chairman of the Board and Chief Executive Officer of Maxwell Shoe
Company Inc.
The Company will host a conference call with management to discuss this
strategic opportunity at 11:00 a.m. eastern time today, which is accessible by
dialing 412-858-4600 or through a web cast at http://www.jny.com/ . A replay of
the conference call is available through March 4 by dialing 877-344-7529 --
enter account 928 and conference 338880.
Jones Apparel Group, Inc. ( http://www.jny.com/ ), a Fortune 500 Company, is a
leading designer and marketer of branded apparel, footwear and accessories. The
Company's nationally recognized brands include Jones New York, Polo Jeans
Company licensed from Polo Ralph Lauren Corporation, Evan-Picone, Norton
McNaughton, Gloria Vanderbilt, Erika, l.e.i., Energie, Nine West, Easy Spirit,
Enzo Angiolini, Bandolino, Napier, Judith Jack, Kasper, Anne Klein, Albert Nipon
and LeSuit. The Company also markets costume jewelry under the Tommy Hilfiger
brand licensed from Tommy Hilfiger Corporation and the Givenchy brand licensed
from Givenchy Corporation, and footwear and accessories under the ESPRIT brand
licensed from Esprit Europe, B.V. Celebrating more than 30 years of service,
the Company has built a reputation for excellence in product quality and value,
and in operational execution.
Certain statements herein are "forward-looking statements' made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements represent the Company's expectations or beliefs
concerning future events that involve risks and uncertainties. Factors that
could cause actual results to differ materially include (1) the businesses of
Jones Apparel and Maxwell Shoe not being integrated successfully, (2) expected
combination benefits from a Jones Apparel/Maxwell Shoe transaction not being
realized, (3) the failure of the proposed transaction to occur, or the
occurrence of the proposed transaction on terms different than those described,
(4) the strength of the economy, (5) the overall level of consumer spending, (6)
the performance of the Company's products within the prevailing retail
environment, and (7) other factors which are set forth in the Company's 2002
Form 10-K and in all filings with the SEC made by the Company subsequent to the
filing of the Form 10-K. The Company does not undertake to publicly update or
revise its forward-looking statements as a result of new information, future
eventsor otherwise.
February 25, 2004
Mr. Mark J. Cocozza
Chairman of the Board, Chief Executive Officer
Maxwell Shoe Company Inc.
101 Sprague Street
Boston, MA 02137-0037
VIA FAX
Dear Mark:
As you know from our conversations since mid-November, Jones Apparel Group is
very interested in pursuing a business combination with Maxwell. On February
18, 2004, we informed you of Jones's interest in acquiring all of the
outstanding shares of Maxwell stock at a price of $20.00 per share in cash. This
proposal has been approved by the Jones Board of Directors and is not subject to
any financing condition. The purpose of this letter is to confirm our proposal
in writing.
We believe that our proposal provides an outstanding opportunity for your
stockholders to maximize the value of their investment in Maxwell. Our proposal
represents a premium of approximately 19% over the closing price for Maxwell
shares on February 19, 2004, the day after you were informed of our proposal,
and aneven greater premium on Maxwell's business when adjusted for your
significant cash position. We believe that the proposed transaction can be
consummated quickly and trust that you will allow your stockholders the
opportunity to directly consider our proposal in a timely manner.
We believe that the proposed transaction would be beneficial not only to the
Maxwell stockholders but also to other Maxwell constituencies. As you know, we
have a high regard for you and your employees and we believe that you and they
will be able to make significant contributions to our combined company. We also
believe that the proposed transaction will greatly benefit the customers of both
Maxwell and Jones.
Jones would very much like to move forward with you on a cooperative basis. To
that end, we and our advisors are eager to meet with you and your advisors as
soon as possible to expeditiously effectuate the proposed transaction. Working
together, I do not anticipate any difficulties in finalizing the details, and I
am confident we can conclude a definitive agreement very quickly.
Since February 19, your stock price has risen over nine percent on higher than
average volume. While we are not aware of any leak of our discussions from
either of our companies, given the recent trading trends in Maxwell stock we
have determined that it is appropriate to publicly announce our proposal and the
contents of this letter.
I believe our proposal represents an exciting opportunity for the stockholders,
employees and customers of Maxwell and will contact you shortly to discuss next
steps for proceeding with the proposed transaction.
Very truly yours,
Peter Boneparth
DATASOURCE: Jones Apparel Group, Inc.
CONTACT: Wesley R. Card, Chief Operating and Financial Officer, or Anita
Britt, Executive Vice President Finance, both of Jones Apparel Group, Inc.,
+1-215-785-4000
Web site: http://www.jny.com/