Fashion company American Apparel has turned down a take-over bid from Iriving Place Capital because the company's management deemed it as much too low. It received the bid shortly after it had decided to part ways with its founder.
Worst time imaginable to sell
Officially, American Apparel's board is still examining the bid, with no decision expected until January. Nevertheless, sources have told Reuters that the bid is way too low, while American Apparel has said it is not looking for a buyer.
The source has told Reuters "this is the worst time imaginable to sell the company as it is on the verge of turning around and realizing its true value". The company will only consider a bid if it is several times higher than what Irving Place Capital was willing to give, namely 50 % above its current share value, worth some 200 million euro.
The company still has to deal with the possible consequences of founder Dov Charney's departure: he has threatened to sue the company and demand a severance package. Currently, he still owns 43 % of the company, but that is managed by Standard General as collateral for a loan.
When Irving Place Capital's bid became public, some thought Dov Charney was pulling the strings and that he would be reinstated as American Apparel's CEO if the bid was accepted. That rumour was quickly denied however.