After what loomed as being a bitter takeover, in the realms of Barbarians at the Gate, the board of clothing and footwear retailer Colorado has rolled over and recommended that shareholders accept an improved $4.70 per share bid from Affinity Equity Partners.

Affinity’s original bid was $4.50 per share. Colorado has also announced a 53 cent special dividend, which according to the company “implies a value [of Affinity’s takeover bid] to existing Australian shareholders of $4.82 to $4.93 per share.”

Apparently, Colorado either doesn’t have very many Australian shareholders, or it doesn’t take its board too seriously, with Colorado shares closing on Friday at $4.67 — below the cash offer price, let alone considering the alleged tax benefits from the special dividend.

In a joint announcement recommending the increased bid, Colorado noted that Affinity’s bid “falls within its assessed range of $4.70 to $5.25” as determined by independent expert, Lonergan Edwards. The announcement didn’t specify too closely that the bid was far closer to the bottom of the range than the middle.

Short of a miracle, Affinity’s $4.70 offer looks final, with the Colorado board agreeing to no negotiations, no solicitation and no talk provisions (unless the other bid is deemed to be superior). Affinity will now conduct due diligence on Colorado.

Peter Fray

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