Martha Stewart Living Omnimedia Inc. slumped around 14 per cent after Sequential Brands Group Inc. made an offer to buy the home-decor company for US$6.15 a share, below its closing price on Friday.
Investors had anticipated a greater price. Through Friday, the shares had jumped 37 percent over 2 days amid reports of the imminent takeover by Sequential Brands, who owns the Avia workout gear and Caribbean Joe island wear brands. That\’s adding to a year-to-date gain that was already the best for Martha Stewart Living since 2009.
The shares declined to US$6.02 at 10:35 a.m. New York time, after falling to US$5.97 for that biggest intraday decline since August 2011.
The deal – worth about US$353 million according to shares outstanding as of March 31 – is going to be paid 50 per cent in stock and 50 per cent in cash, Sequential said Monday in a statement. Martha Stewart, who with her daughter Alexis controls the voting rights, assists as chief creative officer of the brand and take a seat on the board, according to the statement.