BENGALURU (March 3): Michaels Cos said on Wednesday that it would be taken private by Apollo Global Management for US$3.3 billion, less than seven years after the craft supplies retailer returned to public markets.
The private equity firm will pay Michaels shareholders US$22 per share, a 46.7% premium to the stock's close on Friday, before the New York Times first reported a potential deal.
Michaels' shares were trading at just US$4 a year ago, before the Covid-19 pandemic led its sales to jump as people, taking up hobbies while staying at home, rushed to buy art supplies and scrapbooks.
The retailer's stock rose 22% in early trading on Wednesday to slightly above the offer price.
"The company's impressive growth transformation ... in the unprecedented environment of the pandemic, led to an unsolicited offer to buy the company," said Michaels Chairman James Quella, but added that Apollo's offer was compelling.
The total deal value is US$5 billion, Michaels said.
The merger agreement with Apollo provides for a 25-day "go-shop" period, during which Michaels can actively solicit and potentially enter into talks with alternative proposals.
Michaels returned to public markets in 2014, after it was taken private by Blackstone Group LP and Bain Capital LP for US$6 billion in 2006.
UBS Investment Bank is acting as financial adviser to Michaels, while Credit Suisse advised Apollo.