Tuesday, January 24, 2006

Drama on Tommy's Hill

So according to Sowood Capital Management LP (including Sowood Alpha Fund LP) , a fund in Boston that effectively holds 5,798,000 voting shares of Tommy Hilfiger Corporation (TOM), selling TOM to Apax Partners for only $1.6 billion is a bad idea.

We learn of this via Sowood's SEC filing yesterday, which states that Sowood sent a letter to Hilfiger's board stating that selling at the agreed price of $16.80 would undervalue the company's fair value of $19.50 to $27.00. More interestingly, Sowood accuses Tommy Hilfiger (the man) of accepting a favorable but questionable personal deal outside of the TOM/Apax merger terms.

Considering Sowood owns 6.3% of TOM as of the filing, what it has to say must be troubling to both TOM management and the suits at Apax.

Edit (1/24/06): As an aside--according to Seattle Post Intelligence's Venture Capital: Investors fuel push for poop power, Sowood is the largest investor in a venture to harness the power of crap.

Sowood's SC 13D Filing

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