(Source: PrimeNewswire)
SECAUCUS, N.J., July 29, 2009 (GLOBE NEWSWIRE) -- The Children's Place Retail Stores, Inc. (Nasdaq:PLCE) today announced that it has entered into an agreement (the "Securities Purchase Agreement") with former Chairman and CEO Ezra Dabah, who together with certain family trusts owns approximately 16.6% of the Company's outstanding common shares, to acquire approximately 2.45 million shares, 50% of the approximately 4.9 million shares owned by Mr. Dabah and his family, for $28.88 per share, a discount of 5% to the average of the closing prices of the three days ending July 28, 2009.
In connection with the transaction, Mr. Dabah and his father-in-law, Stanley Silverstein, have agreed to resign from the Company's Board of Directors, effective upon the closing of the Company's repurchase of Mr. Dabah's shares which is expected to occur on or about August 3, 2009. The Company has agreed to file a registration statement to facilitate a one-time marketed secondary offering of Mr. Dabah and his family's remaining 2.45 million shares in the event they elect to sell these additional shares. As part of the Securities Purchase Agreement, Mr. Dabah has agreed to certain customary standstill provisions.
Mr. Dabah has advised the Company that the Committee of Concerned Shareholders (the "Committee") will withdraw its slate of three nominees for election at the Company's 2009 Annual Meeting of Stockholders to be held July 31, 2009, and will not vote or present any proxies received from stockholders at the Annual Meeting. Any stockholders of record who submitted GOLD proxy cards and wish to have their shares represented at the meeting may submit a WHITE proxy card, vote on the internet or by telephone, or attend the annual meeting and vote in person. Stockholders who need assistance in voting should contact MacKenzie Partners at 800-322-2885.
The Company expects the purchase of the 2.45 million shares from Mr. Dabah to be approximately 8-12% accretive to 2009 earnings per share including one-time benefits, and approximately 4-6% accretive excluding such benefits. In 2010 and beyond, the Company expects this transaction to be approximately 7-10% accretive to earnings per share annually. The Children's Place will fund the purchase with approximately $75 million in cash repatriated from Company subsidiaries in Hong Kong and Canada, which is expected to result in a non-cash benefit after tax of approximately $4.8 million.
The Company also announced that it is pre-paying the $38 million balance on its term loan concurrently with the closing of the share repurchase and expects to incur a one-time charge of $1.6 million pre-tax in connection with that pre-payment, of which $1.0 million will be non-cash.
Chuck Crovitz, a director and interim Chief Executive Officer, said, "We are very pleased to have reached this agreement with Mr. Dabah to buy back half of his shares, which will be accretive to earnings, and we believe is in the best interests of The Children's Place stockholders.
