The Jones Group Inc. (ticker: JNY, exchange: New York Stock Exchange (.N))
News Release -
Jones Apparel Group, Inc. Proposes to Purchase Maxwell Shoe Company Inc. For $20 Per Share In Cash
* Provides Attractive Premium to Maxwell Shoe Shareholders
* Strategically Complements Jones Apparel's Existing Footwear Business
* Consolidates the Highly-Recognizable AK Anne Klein Apparel and Footwear
NEW YORK, Feb. 25 /PRNewswire-FirstCall/ -- Jones Apparel Group, Inc.
(NYSE: JNY) today announced that it has made an all-cash proposal to Maxwell
Shoe Company Inc. (Nasdaq: MAXS) to purchase 100% of Maxwell's outstanding
common stock for $20 per share, or an aggregate equity value of approximately
Peter Boneparth, Chief Executive Officer, stated, "Maxwell's portfolio of
footwear brands, which includes AK Anne Klein, targets price points from
moderate through bridge categories, and provides a perfect complement to our
existing footwear business. We also believe there are many strategic benefits
to consolidating our AK Anne Klein apparel business with Maxwell's AK Anne
Klein footwear business. In addition, this transaction would further broaden
our footwear brand portfolio and leverage the infrastructure of our footwear
business, creating compelling long-term strategic and financial benefits for
AK Anne Klein footwear is under license from Jones Apparel as a result of
Jones's acquisition of Kasper A.S.L., Ltd. on December 1, 2003.
Mr. Boneparth continued, "The management team of Maxwell Shoe Company has
done a wonderful job in building a business, with approximately $225 million
in annual net revenues. Our decision to make this proposal represents the
continuation of a cooperative dialogue that began during the last quarter of
2003. We believe this is a fair and well-priced proposal that represents an
historic high for the stock and significant value for Maxwell Shoe
shareholders. We look forward to working constructively with Maxwell's board
and management to promptly conclude this transaction."
Wesley Card, Chief Operating and Financial Officer, commented, "This
transaction meets all of our disciplined acquisition criteria, which include:
highly-recognizable brands, diversified distribution channels, excellent
management team, and strong financial metrics. We believe our proposal is
fairly valued, especially considering Maxwell's large cash position. We
anticipate this acquisition to be accretive to our financial results during
its first full fiscal year as part of Jones Apparel. It is premature to
comment on its impact to our 2004 results given the many uncertainties
surrounding timing, non-cash purchase accounting charges and potential
non-recurring items. Our strong financial position and liquidity allows us to
make this proposal on an all-cash basis."
Attached is the full text of the letter delivered earlier today to Mark J.
Cocozza, Chairman of the Board and Chief Executive Officer of Maxwell Shoe
The Company will host a conference call with management to discuss this
strategic opportunity at 11:00 a.m. eastern time today, which is accessible by
dialing 412-858-4600 or through a web cast at www.jny.com . A replay of the
conference call is available through March 4 by dialing 877-344-7529 -- enter
account 928 and conference 338880.
Jones Apparel Group, Inc. ( www.jny.com ), a Fortune 500 Company, is a
leading designer and marketer of branded apparel, footwear and accessories.
The Company's nationally recognized brands include Jones New York, Polo Jeans
Company licensed from Polo Ralph Lauren Corporation, Evan-Picone, Norton
McNaughton, Gloria Vanderbilt, Erika, l.e.i., Energie, Nine West, Easy Spirit,
Enzo Angiolini, Bandolino, Napier, Judith Jack, Kasper, Anne Klein, Albert
Nipon and LeSuit. The Company also markets costume jewelry under the Tommy
Hilfiger brand licensed from Tommy Hilfiger Corporation and the Givenchy brand
licensed from Givenchy Corporation, and footwear and accessories under the
ESPRIT brand licensed from Esprit Europe, B.V. Celebrating more than 30 years
of service, the Company has built a reputation for excellence in product
quality and value, and in operational execution.
Certain statements herein are "forward-looking statements'' made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements represent the Company's expectations
or beliefs concerning future events that involve risks and uncertainties.
Factors that could cause actual results to differ materially include (1) the
businesses of Jones Apparel and Maxwell Shoe not being integrated
successfully, (2) expected combination benefits from a Jones Apparel/Maxwell
Shoe transaction not being realized, (3) the failure of the proposed
transaction to occur, or the occurrence of the proposed transaction on terms
different than those described, (4) the strength of the economy, (5) the
overall level of consumer spending, (6) the performance of the Company's
products within the prevailing retail environment, and (7) other factors
which are set forth in the Company's 2002 Form 10-K and in all filings with
the SEC made by the Company subsequent to the filing of the Form 10-K. The
Company does not undertake to publicly update or revise its forward-looking
statements as a result of new information, future events or otherwise.
February 25, 2004
Mr. Mark J. Cocozza
Chairman of the Board, Chief Executive Officer
Maxwell Shoe Company Inc.
101 Sprague Street
Boston, MA 02137-0037
As you know from our conversations since mid-November, Jones Apparel Group
is very interested in pursuing a business combination with Maxwell. On
February 18, 2004, we informed you of Jones's interest in acquiring all of the
outstanding shares of Maxwell stock at a price of $20.00 per share in cash.
This proposal has been approved by the Jones Board of Directors and is not
subject to any financing condition. The purpose of this letter is to confirm
our proposal in writing.
We believe that our proposal provides an outstanding opportunity for your
stockholders to maximize the value of their investment in Maxwell. Our
proposal represents a premium of approximately 19% over the closing price for
Maxwell shares on February 19, 2004, the day after you were informed of our
proposal, and an even greater premium on Maxwell's business when adjusted for
your significant cash position. We believe that the proposed transaction can
be consummated quickly and trust that you will allow your stockholders the
opportunity to directly consider our proposal in a timely manner.
We believe that the proposed transaction would be beneficial not only to
the Maxwell stockholders but also to other Maxwell constituencies. As you
know, we have a high regard for you and your employees and we believe that you
and they will be able to make significant contributions to our combined
company. We also believe that the proposed transaction will greatly benefit
the customers of both Maxwell and Jones.
Jones would very much like to move forward with you on a cooperative
basis. To that end, we and our advisors are eager to meet with you and your
advisors as soon as possible to expeditiously effectuate the proposed
transaction. Working together, I do not anticipate any difficulties in
finalizing the details, and I am confident we can conclude a definitive
agreement very quickly.
Since February 19, your stock price has risen over nine percent on higher
than average volume. While we are not aware of any leak of our discussions
from either of our companies, given the recent trading trends in Maxwell stock
we have determined that it is appropriate to publicly announce our proposal
and the contents of this letter.
I believe our proposal represents an exciting opportunity for the
stockholders, employees and customers of Maxwell and will contact you shortly
to discuss next steps for proceeding with the proposed transaction.
Very truly yours,
SOURCE Jones Apparel Group, Inc.