Collective Chatter Heats Up Again

Who is chasing Collective?
Following a new press report about the potential sale on Tuesday, industry insiders said Wolverine World Wide Inc. or Skechers USA Inc. could both be entertaining a bid for Collective.
A source close to the company said the first round of bidding was due to wrap up shortly, with the second round set to commence next month. Insiders said the deal could go one of a few ways — among them that a consortium consisting of a strategic player and a private equity company could join forces on a deal, with the strategic player more likely being a vendor than a retailer.
A report today in the New York Post suggested, citing unnamed sources, that Wolverine was a likely contender.
“It would make a lot of sense, and they are actively looking for acquisitions,” said Jonathon Grassi, an analyst with Longbow Capital. “But it depends on where this pricing goes: if it goes to the high end, I can see them balking.
“Sperry Top-Sider, Saucony and Keds probably all look pretty attractive to Wolverine,” Grassi continued.

Other analysts, who would only speak on the condition of anonymity, suggested that Skechers could be the most likely buyer.
“They would love [to get] a more credible athletic name,” said one market watcher, referring to Saucony.

Wolverine had cash holdings of $97.9 million as of Sept. 10, 2011, and no significant debt; while Skechers had $248 million in cash on hand as of Sept. 30, 2011, and debt of $79 million.

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