Authentic Brands to take Guess private in $16.75 per share acquisition

Guess (GES) announced it has signed a definitive agreement for certain existing Guess shareholders, including Maurice Marciano, Paul Marciano, Nicolai Marciano, and Carlos Alberini and certain of their respective trusts, foundations and affiliates, to enter into a strategic partnership with Authentic Brands, under which, in connection with the take-private transaction, Authentic will acquire 51% of substantially all Guess intellectual property after which all of the outstanding common stock of Guess not already beneficially owned by the Rolling Stockholders will be acquired in an all-cash transaction that values Guess at approximately $1.4B, including debt. The Rolling Stockholders will own 49% of all Guess intellectual property, and current Guess management will continue to run the business and own 100% of the operating company. Under the terms of the agreement, Guess shareholders will receive $16.75 per share in cash, representing a premium of approximately 73% to Guess’s unaffected closing common stock price on March 14, the last trading day prior to Guess’s press release announcing its receipt of a non-binding acquisition proposal from a third party. The transaction is expected to close in the fourth quarter of Guess’s 2026 fiscal year, subject to satisfaction or waiver of regulatory and other customary conditions, including approval by the holders of a majority of Guess’s outstanding common stock and a majority of the votes cast by the unaffiliated stockholders of Guess. The Guess board of directors, with Paul Marciano and Carlos Alberini recusing themselves, unanimously approved the proposed transaction upon the unanimous recommendation of the special committee of independent and disinterested directors that led the review and negotiation of this transaction. The rolling stockholders have agreed to roll over their shares of common stock and incentive equity of Guess in connection with, and vote their shares of common stock in favor of, the proposed merger and the other transactions contemplated by the merger agreement, with such voting obligation terminating if the merger agreement is validly terminated, including in connection with a “superior proposal.” The transaction is not subject to a financing condition. The transaction will be financed through a combination of rollover equity by the Rolling Stockholders and cash commitments by Authentic. Under the terms of the indenture, dated as of April 17, 2023, between Guess and U.S. Bank Trust Company, National Association, as trustee, holders of Guess’s 3.75% convertible senior notes due 2028 will have certain rights to cause the repurchase, redemption or conversion of their Convertible Notes in connection with the transaction. Guess expects to pay a quarterly cash dividend of 22.5c per share through the closing of the transaction. Upon completion of the transaction, Guess’s common stock will no longer be listed on any public market.