PHILADELPHIA (BestGrowthStock) – J Crew Group Inc (JCG.N: ) Chairman and Chief Executive Mickey Drexler weighed a sale of the clothing retailer for nearly seven weeks before informing the board of discussions with suitors, according to a company filing with the U.S. Securities and Exchange Commission.
Drexler, who owns about 11.8 percent of J Crew’s common stock, held talks with private equity firms TPG and Leonard Green starting on August 23. The board was not notified of the discussions until between October 7 and October 11, according to the Monday filing. The board formed a special committee to weigh a sale on October 15.
J Crew could not be immediately reached for comment on the filing.
A $2.86 billion deal to acquire J Crew was announced on November 23, with TPG Group and Leonard Green & Partners LP agreeing to buy the company for $43.50 a share, a premium of about 15 percent.
J Crew shares have traded above the offer price, indicating investors expect a richer offer to emerge. The shares closed at $44.04 on Monday.
The retailer is allowed to solicit better offers until January 15.
In addition to the TPG-led group, two other suitors who were not named weighed bids for the company but no formal offers emerged, according to the filing.
Drexler also informed J Crew’s board that “he had significant reservations about the prospect of working for a new boss, but that he had a high comfort level with TPG and had a positive experience with them during the period in which TPG owned the company,” the filing said.
TPG bought J Crew in 1997 and hired Drexler six years later. It sold its stake after taking J Crew public in 2006.
Under the deal with TPG and Leonard Green, Drexler will continue as chairman and CEO and maintain a significant equity investment in J Crew.
(Reporting by Jessica Hall; editing by John Wallace)
J Crew chief weighed deal without board :filing
