American Greetings Corp. (AM:US), the biggest publicly traded greeting-card maker, agreed to be taken private by a group led by Chief Executive Officer Zev Weiss for about $524 million.
The group, including Chairman Morry Weiss and Chief Operating Officer Jeffrey Weiss, offered $18.20 a share in cash, 27 percent more than the close of the Class A stock on Sept. 25, the day before the Weiss family first proposed to acquire the company. A 15 cent-a-share dividend may also be offered, which would give stockholders $18.35 a share for the deal, the Cleveland-based company said today in a statement.
The Weiss brothers had made an offer of $17.18 a share in September, saying that they wanted to return American Greetings, which was founded more than a century ago and began trading publicly in 1958, to family ownership. They raised that offer to $17.50 in January.
American Greetings rose (AM:US) 12 percent to $18.05 at the close in New York. The shares had dropped 4.7 percent this year through March 28, compared with a 10 percent gain for the Standard & Poor’s 500 Index.
The deal’s total value of about $878 million includes the assumption of the company’s notes due in 2021, the settlement of some stock options and the repayment of borrowings under a credit facility.
The acquisition is being financed by the Weiss family, cash funded by a $240 million non-voting preferred stock investment by a unit of Koch Industries Inc. and $600 million in debt financing, the company said.
Revenue at American Greetings, which counts Wal-Mart Stores Inc. and Target Corp. as its biggest customers, rose 6.1 percent to $1.7 billion in the year ended Feb. 29, 2012.
American Greetings, which competes with closely held Hallmark Cards Inc., sells cards under brand names such as Carlton Cards and Papyrus, as well as gift packaging, party goods and stationery, according to a filing last year. More than 80 percent of Americans, mainly women, buy greeting cards each year with the average customer in the mid- to late 40s, American Greetings has said.
Peter J. Solomon Co. is acting as financial adviser to the special committee of American Greetings’ board while Sullivan & Cromwell LLP is providing legal advice. KeyBanc Capital Markets is financial adviser to the Weiss family and Jones Day is acting as legal counsel.
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