Destination XL is urging shareholders to reject a takeover proposal from Zodiac Partners II, arguing that the offer significantly undervalues the business.
The Massachusetts-based retailer, which specialises in big and tall men’s apparel and footwear, operates more than 250 stores and outlet locations alongside its e-commerce platform and mobile app.
In addition to its own products, the company works with major brands to offer extended-size versions of apparel tailored for larger builds.
Destination XL’s board unanimously recommended that shareholders not tender their shares under Zodiac’s cash offer of $0.82 per share.
Board chair Lionel Conacher described the proposal as “highly conditional and opportunistic”, saying it fails to reflect the company’s underlying value.
“We therefore recommend shareholders reject the offer and not tender their shares,” Conacher said.
The retailer has filed its formal recommendation with the US Securities and Exchange Commission.
Destination XL said the review of Zodiac’s proposal required substantial time and attention from management and the board, contributing to a delay in the release of its first-quarter results.
The company now expects to report earnings before the market opens on June 3.
- Further reading: Plus-size brands FullBeauty Brands and DXL to merge.
