Sun Capital wants to take Furniture Brands private

By Lisa Kerner

Charlotte, N.C., Feb. 21 - Furniture Brands International, Inc. investor Sun Capital Securities Group, LLC offered to take the company private at a "substantial premium" to its 30-day average price of $8.95 per share.

In addition, Sun Capital said it planned to keep the company's management and headquarters location intact.

The offer is not subject to financing.

Sun Capital is the company's third largest investor, with a 9.4% stake in Furniture Brands. The investor made its proposal in a Feb. 20 letter to the company's board of directors and included in a schedule 13D filing with the Securities and Exchange Commission.

According to Sun Capital, Furniture Brands' "inability to implement effective operating strategies has placed it at a competitive disadvantage."

As a private company, Furniture Brands could operate "without the constraints and burdens of public market scrutiny," Sun Capital said.

Sun Capital noted that Hong Kong-based furniture company Samson Holding Ltd. has expressed interest in acquiring Furniture Brands. Samson has a 14.9% ownership interest in the company.

With two strategic buyers poised to provide Furniture Brands shareholders with a "substantial premium in the context of a buyout," Sun Capital urged the company's board to act quickly on its proposal.

Furniture Brands said it would take no action in response to the offer.

"The letter from Sun Capital is non-binding, does not include an offer price for the shares, and contains numerous caveats including due diligence, and therefore does not provide the company's board of directors with any meaningful basis upon which to evaluate the letter," the company said in a news release.

"We are executing a strong strategic transformation that is already creating value for Furniture Brands shareholders," added Ralph Scozzafava, Furniture Brands' vice chairman and chief executive officer.

"We're on track with our own aggressive timetable to transform this company, and we're already seeing the positive results of our efforts. Sun Capital is aware of our strategic initiatives and has to date been supportive of the plan.

"Today's letter comes when many industry observers see the home furnishings industry at the bottom of the cycle. We have an obligation to manage this business so that all shareholders can participate in the benefits of our strategic plan as well as improving industry dynamics."

Sun Capital is a private investment firm focused on leveraged buyouts, equity, debt, and other investments.

Furniture Brands is a furniture maker and distributor based in St. Louis.

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