Tarrant Apparel to Go Private
The publicly traded Los Angeles–based private-label manufacturer Tarrant Apparel Group has announced plans to go private through a merger deal with Sunrise Acquisition Co. and its subsidiary, Sunrise Merger Co.
Gerard Guez, Tarrant’s chairman of the board and its interim chief executive officer, and Todd Kay, its vice chairman, own 100 percent of both Sunrise companies. The deal, which is valued at nearly $15.2 million, was first proposed in April 2008.
Guez, who also owns Seven Licensing Co. LLC and the retailer Live! On Sunset in West Hollywood, Calif., is reported to be Tarrant’s largest shareholder, owning 33 percent. Kay owns 9 percent of the company. The pair propose to pay 85 cents for every share not owned by them. At the time of the initial proposal in 2008, Guez and Kay controlled 51 percent of the company.
A special committee of Tarrant’s board of directors negotiated the merger and unanimously approved the merger agreement, according to a release by the company. The deal is subject to the approval of the shareholders of at least 66 percent of Tarrant’s outstanding shares.
The company was founded in 1985 by Guez. Late last year, NASDAQ threatened to delist the company if it failed to maintain a minimum stock price of $1 per share. An extension of the suspension is in effect until April 17. Tarrant’s stock dropped more than 7 percent on news of the Sunrise merger to 37 cents per share.
Tarrant makes clothes for Macy’s under the American Rag Cie label, as well as New York & Co., Chico’s, Kohl’s and Wal-Mart. —Erin Barajas
