Phillips-Van Heusen Corporation to Acquire Tommy Hilfiger B.V. for Approximately $3.0 Billion
Based on the closing price of PVH common stock on Friday, March 12, 2010 and current exchange rates, PVH would issue to Apax and the other Tommy Hilfiger shareholders approximately 8.7 million shares, subject to certain adjustments, or about 13% of the pro forma outstanding shares. The selling shareholders, including Apax, have agreed to lock-up provisions for a period of 9 to 15 months, subject to certain conditions.
PVH will acquire Tommy Hilfiger on a cash-free/debt-free basis, plus the assumption of EUR 100 million in liabilities and a customary working capital adjustment. The transaction is subject to receipt of financing by PVH, which PVH has agreed to obtain subject to certain limitations on cost and terms. In the event that the transaction does not close due to failure to obtain the financing or certain other conditions, PVH has agreed to pay EUR 69 million to the selling shareholders.
PVH has agreed with affiliates of LNK Partners, L.P. and MSD Capital, L.P. to sell, concurrent with the closing of the transaction, $200 million of perpetual preferred stock, convertible into PVH common stock at $47.74 per share. The preferred stock has no coupon and a liquidation preference equal to the face amount. The preferred stock is convertible into approximately 6% of the pro forma outstanding shares.
In addition to Mr. Gehring, upon closing, Christian Stahl and David Landau (a partner at LNK) will join the PVH Board of Directors. Details of the transaction will be included in a filing on Form 8-K, which PVH expects to file shortly.
Peter J. Solomon Company L.P. is acting as lead financial advisor to PVH in connection with the acquisition and the financing of the transaction and sole advisor to the PVH Board of Directors. Wachtell, Lipton, Rosen & Katz is serving as legal advisor to PVH.