R.G. Barry Corp. (Nasdaq: DFZ) has rejected an unsolicited buyout offer from Mill Road Capital, saying that it “does not represent adequate value for our shareholders.” Mill Road had offered up to $7.75 per share for R.G. Barry, which yesterday closed trading at $5.85 per share.
R.G. Barry Corporation (Nasdaq: DFZ) today announced that its Board of Directors has reviewed and unanimously rejected as not being in the best interest of its shareholders the unsolicited proposal to acquire the Company made January 28, 2009 by Mill Road Capital.
“Consistent with our fiduciary responsibilities, and supported by advice from our financial and legal advisors, our Board gave careful consideration to Mill Road’s proposal, concluded that it does not represent adequate value for our shareholders, and rejected it,” said Gordon Zacks, Chairman of the Board of Directors of R.G. Barry Corporation. “Because we believe that our business plan is likely to deliver greater value to our shareholders over time, the Board concluded that the Mill Road proposal does not merit further consideration. Our Board and management team remains committed to delivering maximum value for our shareholders over time.”
Greg Tunney, President and Chief Executive Officer, said, “Our Board believes that it is in the best interest of R.G. Barry’s shareholders to continue the Company’s strategy of managing its traditional business to generate attractive returns to shareholders while at the same time introducing new and innovative products to new channels and exploring targeted acquisitions and other growth initiatives to generate additional value for shareholders. We believe our share price is undervalued in the current depressed stock market and does not reflect the true value of our business.”
Evaluation of Capital
The Company also announced that its Board of Directors, with the assistance of its financial advisors, has evaluated whether the Company is accumulating capital beyond what it needs to support its business objective of profitable growth. While the Board supports the goal of returning capital to shareholders if it cannot be used effectively in the Company’s business, it has concluded that it would not be prudent at this time to initiate a dividend policy or otherwise make a cash distribution to shareholders in light of the very difficult conditions in the retail industry and the challenges that even profitable companies are experiencing in obtaining financing. The Board intends to re-evaluate this decision on an ongoing basis.
About R.G. Barry Corporation
R.G. Barry Corporation, the Dearfoams® company, is one of the world’s leading developers and marketers of accessory footwear. Visit us online at <www.rgbarry.com> to learn more about our business.