Founder Offers to Take Kenneth Cole Private; Shares Jump

American clothing designer Kenneth Cole offered to buy the eponymous clothing and footwear company he founded, in a deal that values it at $280 million, expressing concerns the market is too focused on short-term results.

Ramim Talale | Bloomberg | Getty Images Kenneth Cole store in New York

Stockholders in Kenneth Cole Productions

KCP loading...

Quote  |  Chart  |  News  |  Profile

[KCP  Loading...      ()   ], which was founded by the designer in 1982, would receive $15 for each share they own, a 15 percent premium to the stock's Thursday close on the New York Stock Exchange.

The stock rose 21 percent in trading on Friday. In recent years, New York-based Kenneth Cole Productions, which went public in 1994, has seen its stock drop off its lifetime high of over $50 in the early 2000s.

Kenneth Cole owns a 47 percent stake in the company and is its chairman and chief creative officer. He said he is convinced that private ownership is in the best interests of the company and its shareholders, especially in the long run.

"We are all incentivized to grow and develop our company's products, brand and business with a longer-term perspective," he said.

"I believe it is increasingly difficult to develop this type of culture in a public company context, where the public markets are increasingly focused on short-term results."

In a letter to the management team the designer said he would not move forward with the deal unless it is approved by a special committee of independent directors.

He added that he expects the company's management team to remain in place following the proposed deal.

The company — which sells footwear, handbags, apparel and accessories under the brand names Kenneth Cole New York, Kenneth Cole Reaction, Unlisted and Le Tigre — has closed stores to flush out excess inventory and named a new chief executive last June.