The SKM II funds, which collectively own approximately 30% of the outstanding shares of rue21, have entered into a support agreement to vote their shares in favor of the transaction with Apax. Pursuant to the terms of the support agreement, if the agreement with Apax is terminated and rue21 enters into a superior transaction, the SKM II funds have agreed to vote their shares in favor of such superior transaction on the same pro rata basis as unaffiliated stockholders. In addition, the transaction with Apax is subject to approval by a majority of the rue21 shares excluding SKM II's shares. The SKM II funds were established in 1998 and the rue21 stake is their last remaining investment. Since 2005, the SKM II funds have been associated with Apax Partners. The SKM II funds were independently advised in this transaction.
Bruce Hartman, Chairman of the Special Committee, stated, "This transaction is the result of diligent analysis and thoughtful deliberations by the Special Committee over many months with the assistance of our advisors. This all-cash transaction delivers substantial and certain value, and we believe it is in the best interests of rue21 stockholders. To ensure we are maximizing value for rue21 stockholders, we are also committed to running a comprehensive go-shop process to determine if there are any superior alternatives that may exist to the Apax transaction."
John Megrue, Chief Executive Officer of Apax Partners U.S. and Partner in the firm's Retail & Consumer team, said, "We are very proud of the growth that rue21 has achieved. I have worked closely with Bob Fisch to support the Company's growth from less than 100 stores at the time of the initial investment in 1998 to over 900 stores today, and Apax is excited to continue the journey with the Company's senior management team."
Bob Fisch, Chairman, President and CEO of rue21, said, "Thanks to the hard work of our associates, rue21 has generated strong top and bottom line growth both as a private company and as a public company. We are proud that a sophisticated investor such as Apax continues to believe in our core strategy and recognizes our value-generating capabilities. This transaction will allow us to focus on achieving our long-term objectives, including growing our business to over 1,700 stores in the U.S. and successfully implementing new initiatives such as e-commerce and rueMan."
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