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Hancock Fabrics abandons plan to go private
08
Aug '14
US-based Hancock Fabrics has dropped its plans of taking the company private, on the reason that rising costs far outweigh the benefits.

Hancock Fabrics said it has not abandoned its plans to go private and will again moot the proposal in the near future only if it becomes economically prudent and is in the best interest of the company and its shareholders.

Under current circumstances, the money can be used to improve the growth of business, Hancock said.

Hancock planned to pay $1.20 per share to its fractional shareholders who owned less than 1,000 shares of company stock.

But it came to the notice of the company that shareholders were splitting their Hancock shareholdings or transacting through multiple accounts in an attempt to receive multiple fractional share payments.

Steve Morgan CEO at Hancock said, “At this time, the Board feels that the expense of the transaction, due to the abuse of the multiple account purchases, has grown to a point that it now exceeds the benefits it would generate for our remaining stockholders”.

He added, “This does not mean we would not propose another similar or alternative transaction in the future when and if it becomes economically prudent and in the best interest of the company and its stockholders.”

The craft and fabrics retailer had announced earlier in April that it no longer desires to be traded publicly.

Fibre2fashion News Desk - India

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