According to today’s NY Post, True Religion has been on the sale block since last fall, but wasn’t moving so the denim maker’s board decided to oust the founder Jeff Lubell earlier this week. Even though they finally disposed of the “eccentric” founder, which they considered the main obstacle, the three remaining perspective bidders dropped out of the auction.
Apparently Gores Group, Sycamore Partners and a third private-equity firm have flown the coup because they believe True Religion’s shares have become too expensive and unrealistic. It also appears the prospective buyers are skeptical whether the current management team can maintain its momentum since the outlook for spending on pricey jeans doesn’t look good. So it looks like they will wait it out and see if the stock comes back down and at that time one is sure to bite.
It probably doesn’t help that Lubell’s agreement included a $25 million golden parachute in the event of a sale.
Source: NY Post