By Kevin Kelley
The group of executives led by the Weiss family has reached an agreement with American Greetings Corp. to take the card manufacturer private, the company indicated in a press release Monday.
The deal values the company at $878 million. Its completion is pursuant to shareholder approval and completion of financing commitments. The company’s goal is to execute the transaction by July.
Westlake Mayor Dennis Clough described the announced agreement as another step in the process to take the company private.
“Until it’s approved by the shareholders, we’re going to sort of have to wait,” Clough told West Life.
The mayor said he remains confident that American Greetings will indeed move to Westlake. He added that the city is moving ahead with its infrastructure investments agreed to as part of the company’s move.
The Weiss’ effort to obtain the company caused a delay in final approval for the move of American Greetings’ headquarters to Crocker Park, although some preparations for the move have continued. Last month, crews began clearing trees at the southern end of Crocker Park in anticipation of the development’s final construction phase, which will include the headquarters building.
Under the agreement, shareholders not part of the Weiss group would receive $18.20 per share. This price is a 26.9 percent premium over the price for Class A shares on Sept. 25, the date on which the Weiss family initially offered to acquire the company. The $18.20 price is 13 percent above the stock’s closing price on March 28.
In addition, non-Weiss shareholders will receive a single $0.15 dividend payment per share.
A special committee of independent directors, formed by the company’s board of directors, unanimously approved the deal after reviewing the Weiss’ offer and negotiated the price, the company’s release stated.
“The transaction returns the company to private ownership in a way that we believe enables the company to continue to serve the interests of its customers, employees, suppliers and the communities in which it operates as it has for over a century,” said Jeffrey Weiss, American Greetings’ president and chief operating officer.
Financing of the deal includes $600 million in loans and credit from various banks, as well as a $240 million non-voting stock investment by Koch AG Investment. The latter is a subsidiary of Koch Industries, the private, multinational corporation run by brothers Charles G. and David H. Koch, known for their political contributions to conservative causes.
Steve Feilmeier, the chief financial officer for Wichita-based Koch Industries, told the Wichita Eagle he was not concerned that the greeting card industry is threatened by the Internet.
“Send your wife a text for her birthday and see how that works out for you,” Feilmeier told the paper. “Cards still matter.”