Collective Rides High on Sale Buzz

Shares of Collective Brands Inc. stayed relatively steady at a 10-month high on Friday, a day after reports emerged that the firm is seeking final offers at the end of April from companies including Brown Shoe Co. and South Korea’s privately held apparel retailer E-Land Group.

The stock closed at $19.66 a share on Friday, after surging to $20.28 from $15.54 on Thursday.

Collective Brands expects to receive bids that value it at $20 to $22 a share, according to reports. Brown Shoe did not return calls made to its investor relations department.

The Payless ShoeSource parent, which also owns brands including Saucony and Sperry Top-Sider, has been working for several months with Perella Weinberg Partners LP and Kurt Salmon to explore strategic options.

A price of $22 a share would value the Topeka, Kan.-based firm at about $1.33 billion.

Susquehanna Financial analyst Christopher Svezia, who in February raised his price target for the firm to between $20 and $21, told Footwear News, “It’s tough to envision a specific retailer here in the U.S. that would buy the entire company. Nothing adds up for us.”

Previous reports have cited private-equity firms such as Golden Gate Capital and Leonard Green & Partners LP as potential bidders in consortium with U.S. retailers.

While noting Collective doesn’t seem to have a large hold in Asia, Svezia added, “Companies in Asia have capital, and they’re clearly looking. The bottom line is if [Collective is] looking for strategic options, this is one that’s floated to the surface. We’ll have to wait and see.”

According to South Korea’s Maeil Business Newspaper, E-Land has set aside $1.8 billion for a potential acquisition and will finance the deal with help from the National Pension Service and the Industrial Bank of Korea. The paper also said an E-Land official confirmed the interest in Collective but declined to comment on how much the company was willing to spend.

E-Land previously tried to acquire the local distribution rights for New Balance in 2008, acquired Italian shoemaker Lario in 2010, and took over Korean shoe brand Elcanto in 2011.

It was most recently in the news for its failed bid to buy the Los Angeles Dodgers.

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