Response from FASH management:
biz.yahoo.com
Monday October 23, 5:22 pm Eastern Time
Fashionmall.com says skeptical on Sitestar offer
(UPDATE: releads, adds details throughout, Fashionmall.com comment, updates with closing stock prices)
NEW YORK, Oct 23 (Reuters) - Internet retailer Fashionmall.com Inc. (NasdaqNM:FASH - news) said Monday it was aware of the offer by Sitestar Corp.'s (OTC BB:SYTE.OB - news) to acquire all outstanding shares of the company, but said in a statement it questioned the validity of the offer from the Internet holding firm.
Encino, Calif.-based Sitestar, which trades on the over-the-counter bulletin board, said in a statement it had submitted an offer letter to Fashionmall.com management to acquire all of the 7.5 million outstanding shares of the company for $3 a share -- or about $22.5 million.
Fashionmall.com's Chief Executive Benjamin Narasin said in a statement he was sceptical over the validity of the offer for several reasons, namely Sitestar's recent offer to acquire fellow Web retailer MotherNature.com Inc. (NasdaqNM:MTHR - news), which it subsequently withdrew.
Sitestar on Friday reneged on its $17.4 million offer to acquire MotherNature.com because of what it said was a ``lack of cooperation'' from MotherNature.com's management.
Narasin also said he had previously advised Sitestar that, as the owner of about 46 percent of Fashionmall.com's outstanding common stock, he was not interested in the deal.
He also said the proposal did not appear to include any payment to holders of Fashionmall.com's convertible preferred stock.
The New York-based Fashionmall.com said it has reviewed the offer letter and said if Sitestar chooses to actually engage in a tender offer, Fashionmall.com will let its stockholders know within 10 business days its position on the offer.
Fashionmall.com shares surged 22 percent on Monday before being halted by the Nasdaq stock market. Shares closed at $2-7/16, a 13 percent rise from their Friday closing price.
Shares of Sitestar jumped more than 20 percent early in the day before reversing to fall about 6 percent, or about 1 cent, to close at 17 cents on the over-the-counter bulletin board.
``Fashionmall.com is attractive from both a strategic and financial perspective,'' Sitestar President and Chief Executive Clinton Sallee said in a statement.
``We see long-term growth potential in their Internet assets and brand value,'' Sallee said. ``Our financing is in place and we are seeking management's support for this transaction.'' |
