American Greetings Corp has received a private offer led by CEO Zev Weiss and his brother the chief operating officer Jeffrey Weiss, to buy the company for over $580 million.
The bidding group, which also includes other investors and members of the executives’ families, is seeking to acquire all the common stock in American Greetings that it doesn’t currently own for $17.18 per share, a 20% premium over the company’s closing stock price on Tuesday.
Around 33.8 million shares are currently outstanding, giving American Greetings a value of $580.7 million. Shares in the company leapt 15 per cent following news of the bid. The board will now form a special committee of independent directors to consider the proposal.
American Greetings was formed over 100 years ago and went public in 1958. Members of the founding Weiss family still make up a large part of its senior management, with the Weiss brothers’ father, Mory Weiss, serving as chairman and their uncle Erwin Weiss its senior vice president for specialty business. In making their bid the Weiss brothers said that taking the company private will allow American Greetings to “return to its roots,” and they are confident of securing financing.
Following its purchase of the UK-based Clinton Cards retail chain in June, American Greetings’ fiscal first-quarter profit dropped 78 percent, dragged down by the Clinton’s debt. Total revenue fell 3 percent to $393.1 million and over the past decade the company’s revenue has dropped by 17%. Its second-quarter results are due to be released on Friday.
Cleveland-based American Greetings brands include Carlton Cards, Recycled Paper Greetings and Papyrus.
