Originally posted by Kruz
Sorry...story was on Bloomberg.
Kruz....you're so helpful. lol
04:27pm EST 21-Jun-04 PR
Newswire - First Call Wire (Dick's Sporting Goods, In
Dick's Sporting Goods, Inc. Agrees to Acquire Galyan's Trading Company, Inc.
PITTSBURGH, June 21 /PRNewswire-FirstCall/ -- Dick's Sporting Goods, Inc.
(NYSE: DKS) announced today that it and Galyan's Trading Company, Inc.
(Nasdaq: GLYN) have entered into a definitive agreement and plan of merger for
Dick's to acquire all of the issued and outstanding stock of Galyan's. Under
the terms of the agreement, Galyan's shareholders would receive $16.75 per
share in cash. The acquisition is structured as a cash tender offer for all
of the issued and outstanding shares of Galyan's.
Dick's offer represents a premium of 53% over Galyan's closing stock price
as of June 18, 2004. Based on approximately 18.2 million outstanding Galyan's
shares and the assumption of approximately $57 million in net debt, the
transaction would be valued at approximately $362 million.
Dick's expects to commence the tender offer for the Galyan's shares on
June 28, 2004. The tender offer is contingent upon various conditions,
including that a majority of Galyan's issued and outstanding common stock on a
fully diluted basis are being tendered and not withdrawn. The tender offer and
the transactions contemplated thereby are anticipated to be completed by
October 2004, subject to Hart-Scott-Rodino approval under United States
antitrust laws and customary closing conditions.
Holders of Galyan's common stock who collectively beneficially own
approximately 55% of the outstanding common stock through an affiliate of
Freeman Spogli & Co. and Limited Brands, Inc., have agreed to tender their
shares to Dick's.
Upon completion of the acquisition of the 47 Galyan's stores, Dick's
Sporting Goods would operate 216 stores in 32 states. Dick's and Galyan's
combined generated revenue of approximately $2.2 billion in fiscal 2003.
Following the completion of the merger, the combined company will operate from
Dick's Sporting Goods' corporate headquarters in Pittsburgh, Pennsylvania.
Dick's Sporting Goods management anticipates that the acquisition will be
slightly accretive to its previous diluted earnings per share guidance of
$1.27 - 1.28 for fiscal 2004 and is increasing its guidance to $1.28 - 1.30.
Dick's anticipates diluted earnings per share in 2005 of $1.70 - 1.75, an
increase of more than 30% over the 2004 guidance. These estimates include
savings and synergies, and exclude any merger integration costs. Beginning in
2005, Dick's Sporting Goods' management anticipates that there would be
approximately $20 million of annualized cost savings and merchandise buying
improvements that will result from the acquisition.
"We are excited to have entered into this agreement, which represents an
extraordinary opportunity for both Dick's Sporting Goods and Galyan's," said
Edward W. Stack, Chairman and Chief Executive Officer of Dick's Sporting
Goods. "Combining the financial discipline, operating metrics, and innovative
store design of Dick's that have led to our industry-leading financial
performance, with the people, real estate, and distribution infrastructure of
Galyan's creates a compelling rationale for this transaction."
"The Dick's Sporting Goods and Galyan's store locations are complementary,
and the combination of the Galyan's store design, customer service and premium
locations with Dick's emphasis on execution and inventory management make for
a best in class shopping experience. This combination produces minimal overlap
while providing a stronger presence in existing markets that have significant
remaining in-fill opportunities. We expect to close relatively few stores,
some from each chain due to overlap or financial performance."
Mr. Stack continued, "Galyan's primary distribution center in Plainfield,
Indiana serves the geographic footprint of the combined company very well, and
Dick's intends to continue to operate that facility. The combination of the
Galyan's and Dick's distribution centers position us to support the logistical
needs of our growing company."
Peter J. Solomon Securities Company Limited and Merrill Lynch & Co.
provided financial advisory services to Dick's Sporting Goods in connection
with the transaction.
Conference Call and Simulcast Scheduled to Discuss Acquisition
Management of Dick's Sporting Goods will conduct a conference call to
discuss this acquisition today, at 5:15 p.m. Eastern Time, which will be
simulcast on the web on the Company's web site
. Slides to accompany the
presentation also can be downloaded from the Company's web site.