Destination XL board knocks back bid from Zodiac Partners

Destination XL Group (DXL) and its board of directors on Tuesday rejected a bid from Zodiac Partners to take the plus-size fashion company private, just weeks after the offer was made on May 12.

Florida-based Zodiac Partners, an entity affiliated with Camac Fund, earlier this month made a tender offer to acquire all outstanding shares of DXL for $0.82 a share, valuing the deal at $46 million.

“The DXL board of directors is committed to maximizing shareholder value and taking actions that are in the best interest of the company and its shareholders,” said Lionel Conacher, chairman of the board of DXL, in explaining his board’s rejection of the bid.

“In that light, the board conducted a thorough review of Zodiac’s tender offer and determined that it does not reflect the company’s underlying value. The offer is also highly conditional and opportunistic, seemingly timed to deliberately exploit a period of market dislocation. We therefore recommend shareholders reject the offer and not tender their shares.”

The Zodiac offer comes five months after the Massachusetts-based DXL announced its merger with FBB Holdings, the operator of the FullBeauty and KingSize retailers.

Under the terms of the agreement first reported in December, FullBeauty will merge with a newly formed subsidiary of DXL, with the latter continuing to be a publicly traded entity under the ticker symbol DXLG.

FullBeauty shareholders are set to own 55% of the combined company while Destination XL shareholders will own 45%.