*West Coast Investors Acquire Micro Warehouse
The terms of the agreement, which was unanimously approved by the Micro Warehouse board of directors, call for Micro Warehouse shareholders to receive $19 in cash for each Micro Warehouse share, a significant premium to its average price per share of $13 in the past 30 days. Credit Suisse First Boston and CIBC World Markets agreed to fund $320 million in senior debt financing at the deal's closing.
Jerome York will replace existing CEO and company founder Peter Godfrey when the transaction is complete, which is expected at the end of January. Godfrey could not be reached for comment. It is unclear whether he will remain with Micro Warehouse in another capacity, and company spokesman Bruce Levy said, "I can't answer that. He is no longer going to be CEO."
Other than the CEO shift, no immediate management or operational changes are expected, said Levy. No plans were announced for its future direct marketing strategy. Micro Warehouse's $2 billion computer products and accessories businesses is conducted through its various catalogs, including Micro Warehouse, Mac Warehouse, and Datacomm Warehouse, and its corresponding online sites and telemarketing operation.
Gary Wilson of Northwest said he will work closely with York, but will remain actively involved with Northwest Airlines. It's unclear what role Ovitz will play in the organization, and Levy declined to provide details. The investor could not be reached for comment at presstime.
One of the attractions to its new investors was the potential in more aggressive outbound telemarketing to build sales. The cataloger has stumbled somewhat in recent years, but its post-announcement stock price surged to close at $18.44 on Wednesday, December 22.
A tender offer will be commenced on Tuesday, which will include more details of the deal.