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Shareholders reject buyout offer for Eddie Bauer

February 09, 2007|From the Associated Press

REDMOND, WASH. — Shareholders of financially troubled Eddie Bauer rejected a $286-million buyout offer from a pair of investment firms Thursday. The clothing retailer's shares fell more than 4%.

"The company will continue to operate as a stand-alone, publicly traded company," said Wendi Kopsick, a spokeswoman for Eddie Bauer Holdings Inc.

Eddie Bauer's board said it was considering its next step.

A holding company owned by affiliates of Sun Capital Partners Inc. of Boca Raton, Fla., and San Francisco-based Golden Gate Capital planned to pay $286 million in cash, or $9.25 a share, and assume $328 million in debt to take over Redmond, Wash.-based Eddie Bauer.

The proposal had been approved by regulators and recommended by the company's board. Proxy advisory firms Institutional Shareholder Services and Glass Lewis & Co. also had recommended that clients vote in favor of the sale.

Eddie Bauer has said the acquisition deal was the result of a review of strategic alternatives begun in May.

In an earlier regulatory filing, the company said it lost about $275 million in the nine months that ended Sept. 30.

The clothing retailer had previously been part of Spiegel Inc. but was spun off in 2005 as part of Spiegel's Chapter 11 bankruptcy reorganization. Just about a year after that spinoff, the company announced it might put itself up for sale.

Eddie Bauer shares dropped 39 cents to $8.79 after dropping to a new 52-week low of $6.50 earlier in the session.

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