Perry Ellis is talking to investment banks to give it strategic advice on its next move, according to TheStreet.com. The retailer is rumored to consider putting itself up for sale, and recently it has been licensing its brands to take care of debt. One concern is that an activist investor might hijack the company’s plans. Legion Partners Asset Management along with public pension fund California Teachers Retirement System have taken a 6% stake in the company.
Potential buyers for Perry Ellis include Sequential Brands, Leonard Green & Partners and Iconix. It has been reported that offers have been made for over $30 per share, while the stock has recently traded at around $23 per share.
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CEO George Feldenkreis and his son Oscar who is COO together own a 20% stake in the company. Management has significant obstacles to activist investors gaining too much authority. While 3 of its 7 directors’ seats are open for nomination in March, 50% of shareholders must approve directors and doesn’t allow consent solicitations to change the board composition.