Clothes seller and designer Tommy Hilfiger has accepted a $1.6 billion cash takeover bid from private equity firm Apax Partners.
The deal values Tommy Hilfiger at about $16.80 per share, a premium of 5% based on Thursday's closing stock price. Analysts and investors had thought early in the auction process that the company could fetch more than $20 a share.
Hong Kong-based Tommy Hilfiger put itself on the auction block earlier this year after struggling for months with weakness in its US wholesale business.
Clothes seller Phillips-Van Heusen also said it was in preliminary talks with Apax on how they could collaborate on the Tommy Hilfiger purchase. Apax effectively owns 23% of Philips-Van Heusen's shares.
Tommy Hilfiger's namesake and founder has agreed with Apax on a new deal in which he will continue as the main designer as well as chairman of the strategy and design board. Fred Gehring, chief executive of Tommy Hilfiger Europe, will take over as CEO, replacing David Dyer, who will leave.
