NEW YORK ( TheDeal) - The Weiss family offered again this week to raise its buyout offer for American Greetings ( AM) the greeting card company it founded and controls, following the request of the retailer's special committee. The founding family including chairman Morry Weiss, CEO Zev Weiss and COO Jeffrey Weiss, filed a 13D with the Securities and Exchange Commission on Tuesday, July 2, offering to raise the agreed-upon buyout to $19 per share from $18.20, or an additional $550 million not including the company's $250 million of debt. American Greeting shares slipped 0.2% to close Wednesday at $18.98. The Weiss family first offered to buy out the company in September for $17.18 per share. That price was amended to $17.50 per share in a January offer when the Weiss buyers said they did not intend to further increase the bid, although that increase also limited dividend payments. The $18.20 per share agreement was struck with the special committee March 29, including a 15 cent dividend, the ex-dividend date for which was July 1. The proxy has yet to clear the SEC. American Greetings shareholders representing a majority of the minority vote are required to approve any transaction. The Weiss family owns about a 10% economic interest in American Greetings, but controls half the votes through a special share class. TowerView LLC, a hedge fund with a 6.2% stake in American Greetings, has opposed the valuation and sale process and said in a 13D that this was not the time to sell the company and the Weiss family was getting it cheap. TowerView asked in late May that the financial adviser to the special committee, Peter J. Solomon Co., withdraw its fairness opinion for the $18.20 per share cash deal and ask the special committee to withdraw its recommendation. The Weiss family in a 13D filing Tuesday responded that while it reached a definitive agreement after prolonged, arm's-length negotiations, they would agree on request of the special committee and in "light of recent developments" that enhancing the price to $19 is "the right thing to do."
The special committee for American Greetings was not available for comment. The price increase is subject to the recommendation of the special committee to shareholders and has the approval of the buyer's financing sources. The increase also includes a request that expense reimbursements for the process be doubled to $14.6 million. It would appear that the special committee suggested it might not maintain its recommendation at $18.20 and the Weiss family's reference to "recent developments" might refer to increased trading prices for comparable companies since the PJS fairness opinion was rendered. It seems unlikely that another bidder has surfaced given the length of the process and that the Weiss family have a blocking vote position. A $19 price is better than $18.20, but given how comparable companies have traded since September, American Greetings could still be worth in excess of $21 without a deal, a source following the buyout said. American Greetings shares would be above $20 if the buyout was not in progress, a source said. It is difficult to see why the buyers should warrant additional expense reimbursement, given the control they have held over the sale process, the source said. A revised proxy will perhaps shed light on what interaction has transpired with the special committee since the March merger agreement, he said. Written by Scott Stuart in New York