Holtzman: Blair Offer ‘Inadequate’

by MR Magazine Staff

NEW YORK – Seymour Holtzman may not be able to stop Appleseed’s Topco’s acquisition of Blair Corp., but he’s already made it more interesting.

The Wilkes Barre, Pa.-based investor, who serves as chairman of Casual Male Retail Group and co-chairman of George Foreman Enterprises, has notified the Securities and Exchange Commission that he considers the $42.50-a-share, or $176 million, offer made by Appleseed, an affiliate of Golden Gate Capital, and accepted by Blair on Jan. 23 to be insufficient.

In a Schedule 13D filed with the Securities and Exchange Commission, Holtzman, who is Casual Male’s largest single shareholder, objected not only to the price attached to Blair, but also the manner in which negotiations were conducted. Furthermore, he requested a shareholder list from Blair so that he might directly communicate with other shareholders about his concerns.

“Although we applaud management’s effort to increase shareholder value, we believe that the price of $42.50 per share is inadequate,” Holtzman said in a press release attached to the SEC form. “More importantly, we think Blair should not have rushed into this transaction so quickly. We believe multiple-channel retailers of Blair’s size, scope and profitability are attractive to both strategic and financial buyers, especially given Blair’s pristine balance sheet.”

He called the fast pace leading up to the acquisition agreement on Jan 23 “startling. We saw an initial offer by Appleseed’s, which we view as a lowball bid, followed three business days later by a definitive merger agreement at $42.50 a share.

“We believe the Appleseed’s transaction was pursued in a closed process without involving other potential suitors, and is punctuated with Blair giving Appleseed’s an unnecessary breakup fee with an inadequate window of time for other potential suitors to express their interest and perform due diligence.”

Golden Gate and Appleseed’s originally offered Blair $37.50 a share in a letter to Blair’s management on Jan. 3. The $42.50 offer accepted 20 days later, Holtzman pointed out, is “only 50 cents more than the $42 per share the company paid in July 2005 in a self-tender for 4.4 million shares at a total price of $184.8 million.”

Holtzman and affiliated investment vehicles own a total of 196,800 shares of Blair, or 5.1% of the total, all of them picked up in open-market transactions beginning on Oct. 23, 2006, and, according to the SEC filing, ending on Jan. 24. The least he paid for shares was $27.96, when he acquired 21,100 shares on Oct. 25 of last year, and the greatest amount rendered was $41.89 for his 1,600-share purchase on Jan. 24. The average price paid for his shares is $32.41.

His total investment to date is $6.4 million. If the Blair acquisition were to proceed as agreed, Holtzman’s shares would be worth $8.4 million, netting him $2 million on his recent investments.

In American Stock Exchange trading Tuesday, shares of Warren, Pa.-based Blair closed at $41.97, up 5 cents, or 0.1%. Their high for the last 12 months is $46.44, reached on April 26.