Martha Stewart's Star Falls Hard as Takeover Price Underwhelms Shareholders

NEW YORK (TheStreet) -- Martha Stewart has ended up in the bargain bin.

Some 15 years after Martha Stewart Omnimedia (MSO) went public trumpeting the exploits of its namesake superstar celebrity chef and all-around homemaker, the New York-based company is being sold at rock bottom. 

Shares of Martha Stewart's cooking and homemaker business were tumbling Monday as Sequential Brands Group (SQBG) said it would buy the company for $6.15 a share, well below its Friday closing price of $6.98, and even further below its 1999 opening price of $49.50.

Valuing the company at $353 million is sure to disappoint investors who were looking for as much as $10 per shares. For the moment, the Sequential deal makes plain that Martha Stewart, for all her early firepower, was unable to make the transition to build on her early fame and more recently, make the transition to digital platforms.

"Martha was incredibly innovative in creating the Omnimedia model of connecting television and magazines and books with retail merchandising," said Peter Kreisky, a media strategy consultant, in a phone interview. "But ultimately, Martha Stewart turned out to be the company's greatest asset and its greatest liability. The model needed to be reinvented, and it wasn't."

New York-based Martha Stewart Omnimedia was falling 14% to $6.02 while Sequential's shares were adding 0.3% to $17.05, its investors apparently satisfied it's acquiring a brand with enough firepower to sell licensed product at mass-market retail chains. New York-based Sequential also owns the Jessica Simpson brand as well as the Avia workout gear and Caribbean Joe.

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