Here is the news on the rumored buyout offer from the WSJ:
SUZANNE KAPNER
Updated Dec. 18, 2014 7:27 p.m. ET
American Apparel Inc. has been approached by Irving Place Capital about a possible takeover, according to people familiar with the matter.
Irving Place sent an expression of interest to the board of the Los Angeles retailer in the last few weeks, the people said. The board initially rebuffed the approach because the indicative price was too low, they said.
Irving Place has since increased the price range to $1.30 to $1.40 a share and the board has yet to respond to the second approach, they said.
American Apparel's shares jumped 45% to $1 on the news which was first reported by the New York Post.
The takeover approach came before the board this week the employment of founder Dov Charney , who was suspended as president and chief executive by the board in June for alleged misconduct. Paula Schneider was named to succeed him as CEO.
American Apparel has struggled with falling sales and swelling losses. In the three months through Sept. 30, the company lost $19.2 million, compared with a loss of $1.5 million a year earlier. Sales fell 5% to $156 million from a year earlier.
In July, hedge fund Standard General agreed to invest $25 million in the retailer, part of which American Apparel used to pay off a loan.
Standard General controls nearly 44% of American Apparel shares, a stake amassed through a deal with Mr. Charney that essentially gave the hedge fund voting control over Mr. Charney's shares.
The board rejected the first one but has not yet responded to this one.
From the Q3 10Q:
Liquidity and Capital Resources
As of September 30, 2014, we had $9.4 million in cash, $27.0 million outstanding on our $50.0 million asset-backed revolving credit facility and $20.4 million of availability for additional borrowings under the facility. As of November 3, 2014, we had $8.4 million of availability for additional borrowings under the facility.
We and Standard General Group (“Standard General”) are in the process of negotiating a $15 million unsecured credit agreement between one or more entities affiliated with Standard General and one or more of our foreign subsidiaries as borrowers. We expect to enter into this credit agreement in the fourth quarter of 2014.
