Rue21 shareholders agree to US$1.1 bil. acquisition by private equity company
By Teresa Lindeman, Pittsburgh Post-Gazette/MCTPittsburgh Post-Gazette/MCT--In a special meeting that took only eight minutes to complete, Cranberry teen clothing retailer rue21 officially tallied the votes of its shareholders on a US$1.1 billion deal to sell the company to London-based Apax Partners, which is already invested in the business.
September 21, 2013, 12:07 am TWN
The company said 22.4 million, or more than 95 percent, of outstanding shares — including 15.3 million shares held by investors not affiliated with the major investor — were voted in favor of taking a US$42-a-share offer for the business.
The vote, which came at a special shareholders meeting Thursday at rue21 headquarters in Thorn Hill Industrial Park, checks off another requirement in the sale that company officials announced in May and now expect to close by early October.
Only one shareholder — a former employee — attended the meeting, although the room was filled with current employees and the atmosphere was relaxed. Stacy Siegal, senior vice president, general counsel and chief administrative officer, ran the meeting since Bob Fisch, president, CEO and chairman, was out of town.
Ms. Siegal called the gathering to order at 9:01 a.m. and worked through the agenda, offering any shareholders present an opportunity to submit a ballot. No one took her up on the offer.
The polls closed at 9:06 a.m. and the results of votes submitted in advance of the meeting were announced.
On a second nonbinding, advisory vote on golden parachute packages for top rue21 executives, almost 18 million votes, or 76.5 percent, were cast in favor.
Two independent proxy advisory firms had split on whether shareholders should back the packages, with one critical of both the plan to pay cash for stock awards that weren't yet vested and of Fisch's option to choose to leave his jobs six months after the sale and still get a significant cash severance.
The retailer traces its roots to 1976, when it was founded as a specialty apparel retailer of inexpensive fashions, although it didn't take the rue21 name until later. Fisch joined the company in 2001, after private equity investors acquired the operation.
Rue21, which has grown sales in part by opening new stores in communities that don't have a concentration of teen retailers, had more than 950 locations in 47 states as of early August, according to filings with the Securities and Exchange Commission.
Shares of the company, which rose from just above US$34 to US$41.96 after the planned sale was announced, closed Thursday at US$40.96.
They've been down slightly in recent days following the company's report that sales over the summer months had been slow, reflecting a sluggishness that has affected other teen retailers, as well. There has been some concern that the poor performance might affect financing for the deal.