Kellwood Receives Unsolicited Bid of $21 A Share

Kellwood, owner of popular clothing brands Baby Phat and Nautica, said it received an unsolicited bid from Sun Capital Securities Group to acquire all of its outstanding shares for $21 per share, sending shares up as much as 34 percent.

Based on Kellwood's 25.89 million shares outstanding, the deal, announced just before midnight on Tuesday, would be worth about $543.7 million.

The offer represents about a 38 percent premium to Tuesday's closing price of $15.17 for Kellwood's shares on the New York Stock Exchange.

The company said its board of directors will evaluate the Sun Capital proposal, as well as other alternatives available to the company.

Kellwood said it would take into account the potential benefits that may be realized through its previously announced long-term strategic plan.

Earlier this month, Kellwood reported a quarterly net loss, citing one-time charges, and slashed its full-year earnings outlook based on caution related to a slowdown in consumer spending. Kellwood also said it was restructuring to have fewer operating divisions.

Kellwood shares, which rose $4.16 to $19.33 Wednesday, have slumped more than 50 percent in 2007. They fell 5 percent on Tuesday after an analyst downgraded the stock, citing a variety of risks including possible obstacles to its acquisition strategy and financial pressure on its mid-market consumer.