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Hanover Direct gets going private proposal from Chelsey Direct
28 Feb '06
2 min read
Hanover Direct Inc has received a proposal from Chelsey Direct LLC, the company's largest shareholder, to acquire the shares of common stock of the company that Chelsey does not already own for a cash purchase price of $1.25 per share in a letter dated February 23rd 2006.
Chelsey and its affiliates beneficially own approx. 69 percent of the issued and outstanding Common Stock and approx. 75 percent of the Common Stock after giving effect to the exercise of all outstanding options and warrants to purchase Common Stock beneficially owned by Chelsey.
In addition, Chelsey is holder of 100 percent of the company's Series C Participating Preferred Stock. Including the Series C Preferred and outstanding options and warrants beneficially owned by Chelsey, Chelsey maintains approx. 91 percent of the voting rights of the company.
The letter indicates Chelsey's belief that the company should become privately owned due to the financial drain imposed by the company remaining public as well as the limited benefits to the company from maintaining that status. It states that Chelsey or an affiliate proposes to enter into a cash merger agreement with the company and to commence a cash tender promptly after the execution of that agreement.
The company's Board of Directors has not yet reviewed this proposal. It is anticipated that the proposal will be evaluated by a special committee of the Board consisting of independent directors.
Hanover Direct Inc provides quality, branded merchandise through a portfolio of catalogs and e-commerce platforms to consumers. It's portfolio of home fashion and apparel catalogs and Internet websites include Domestications, The Company Store, Company Kids, Silhouettes, International Male and Undergear.
Chelsey and its affiliates beneficially own approx. 69 percent of the issued and outstanding Common Stock and approx. 75 percent of the Common Stock after giving effect to the exercise of all outstanding options and warrants to purchase Common Stock beneficially owned by Chelsey.
In addition, Chelsey is holder of 100 percent of the company's Series C Participating Preferred Stock. Including the Series C Preferred and outstanding options and warrants beneficially owned by Chelsey, Chelsey maintains approx. 91 percent of the voting rights of the company.
The letter indicates Chelsey's belief that the company should become privately owned due to the financial drain imposed by the company remaining public as well as the limited benefits to the company from maintaining that status. It states that Chelsey or an affiliate proposes to enter into a cash merger agreement with the company and to commence a cash tender promptly after the execution of that agreement.
The company's Board of Directors has not yet reviewed this proposal. It is anticipated that the proposal will be evaluated by a special committee of the Board consisting of independent directors.
Hanover Direct Inc provides quality, branded merchandise through a portfolio of catalogs and e-commerce platforms to consumers. It's portfolio of home fashion and apparel catalogs and Internet websites include Domestications, The Company Store, Company Kids, Silhouettes, International Male and Undergear.
Hanover Direct Inc
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