LOS ANGELES-Former American Apparel Inc. CEO Dov Charney teams up with two private equity firms in a bid to buy back the company.
In a Schedule 13D form filed with the SEC, Hagan Capital Group and Silver Creek Capital, collectively known as the Investor Group, have offered $300 million to acquire American Apparel and resolve its debt.
The Investor Group’s offer features an investment of $130 million including a $40 million new term loan and $90 million of new equity. American Apparel’s current debt holder plan offers $75 million equity.
The bid is the latest move by Charney to regain ownership of the company since his ouster in 2014. Both Charney and members of the Investor Group stress that the bid is a collective effort to rebuild the company.
“This discussion is not just about the impact on the investor returns, but also about the livelihood of thousands of workers,” explains Charney.
Update January 15, 2016-6:07 AM EST: An updated news brief from Bloomberg Business reports that American Apparel Inc.’s board of directors has rejected the $300 million bid offered by Charney and the Investor Group.
Update January 25, 2016: Following a rejection of Charney’s $300 million bid by American Apparel’s board of directors, a Delaware bankruptcy court has also rejected Charney’s bid and cleared the way for the company to exit bankruptcy. Under Judge Brendan L. Shannon’s approval, American Apparel will be taken over by its lenders instead of the proposed buyback by Charney. The approved plan will cut an estimated $200 million in debt.