Pretty much nobody pops a deal heading into a long weekend, but maybe it's appropriate for beachwear retailer West 49, which agreed to a takeover by Billabong of Australia.
It's a hefty premium for a stock that hasn't been nearly as cool as the company's clothes (and judging by recent sales performance, the clothes aren't as cool as they once were either).
Add that to a lockup agreement for the biggest shareholders, it's hard to see much of a bidding war coming on for West 49. Early bids for the shares show it opening Wednesday right at the Billabong price of $1.30 a share, a substantial premium to yesterday's close of 55 cents.
It's not hard to see how that kind of payout would appeal to the company, given that West 49 was a $2 stock back in 2005 but has been in a long slide that was only recently arrested, and earnings have been skinny. Same store sales were down in West 49 banner stores by 3 per cent, and margins tighter. That resulted in a $2.6-million loss.
National Bank Financial advised the special committee of West 49's board, while Goldman Sachs was on for Billabong.
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