American Greetings Corp. said Wednesday that a group led by its CEO and chief operating officer wants to buy the company and take it private in a deal that values it at about $581 million.
The Cleveland-based greeting card company’s shares jumped 16 percent on the news.
American Greetings said its board received the proposal from Chief Executive Zev Weiss and President and his brother, Chief Operating Officer Jeffrey Weiss, on Tuesday.
The group, which also includes other investors and members of the executives’ families, wants to acquire all of the company’s common stock that it doesn’t currently own for $17.18 per share. That is a 20 percent premium over American Greetings’ Tuesday closing stock price.
Based on the company’s about 33.8 million outstanding shares, the offer values American Greetings at $580.7 million.
American Greetings said it expects its board to form a special committee of independent directors to consider the proposal. The company said it doesn’t expect to make any further comments about the offer until a deal is struck or it rejects the bid.
In June, American Greetings said its fiscal first-quarter profit dropped 78 percent, dragged down by charges related to the bankruptcy of Britain’s Clinton Cards PLC. Total revenue fell 3 percent to $393.1 million. The company is scheduled to release second-quarter results Friday.
American Greetings had acquired about 400 Clinton Card stores earlier in June, along with the namesake brand.
The U.K. greeting card company is one of American Greeting’s biggest customers, but ran into financial trouble. It had about 750 stores before being placed under administration last month.
In morning trading, shares of American Greetings rose nearly 15.6 percent, or $2.23, to $16.57. The stock is down about 24 percent from its 52-week high of $21.68, reached a year ago.