The majority shareholders in card publishing giant American Greetings, (AM) Chief Executive Zev Weiss and Chief Operating Officer Jeffrey Weiss, have offered to raise their bid to acquire all outstanding shares of the company that they and other family members do not already own. The news caused shares of AG to rise by 10 percent in extended trading.
The revised offer of $17.50 per share compares with an initial bid of $17.18 per share put in last September, that prompted several minority shareholders to announce their intention to sue AG for what they considered to be an unfair bid. It was described as a ‘terrible, terrible price’, by one minority shareholder, who said that the lawsuits have arisen ‘because the price is ridiculous’.
The plaintiffs alleged that members of the Weiss family used inside information to wrest control of the business and breached their fiduciary duties owed to current shareholders.
The latest offer values the company at about $553.7 million based on 31.6 million shares outstanding. Zev Weiss has informed the board of AG that the buyout group, which holds around 80 per cent of AG’s Class B shares, has secured $700 million of bank funding for the deal, but also said that the group will not increase the offer price any further.
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.
Cleveland-based American Greetings brands include Carlton Cards, Recycled Paper Greetings and Papyrus. In June 2012 it also acquired British retail chain Clinton Cards, which it already supplied with a large range of products via its UK subsidiary, UK Greetings.
