Home Products International Inc.'s chief executive officer wants to purchase all outstanding shares of the publicly traded housewares company.
Jim Tennant, also chairman of the Chicago-based firm, proposed a per-share price of $1.50, according to a Feb. 5 filing with the Securities and Exchange Commission. As of Feb. 6, the stock was trading at $1.23 per share. Tennant, who has been chairman, CEO and a director since 1994, would team with members of management for the proposed buyout.
Tennant did not return a call seeking comment before deadline.
HPI has formed a special committee of its independent directors to handle negotiations, hiring investment banking firm Mesirow Financial. Tennant and his group are working with investment banking firm Stifel Nicholas & Co. Inc.
Tennant currently owns 467,628 shares; JP Morgan Chase & Co. is the largest shareholder, with nearly 1.3 million shares. The firm's stock trades under the HOMZ ticker symbol on Nasdaq.
Like its competitors, HPI struggled through 2003, battered by rising resin costs, overseas competition and big-box stores reluctant to accept price increases. HPI's largest customer is Kmart Corp., which announced the closure of 326 stores in 2003. To cut costs, HPI closed an injection molding facility in Eagan, Minn.
Historically, resin has represented 20-25 percent of HPI's total cost of goods sold; through the first 39 weeks of 2003, that percentage increased to 31 percent, officials disclosed in HPI's third-quarter SEC filing. During the 13-week period ended Sept. 27, HPI recorded a loss of $3 million before taxes on sales of $61 million; that compares with a profit of $6.2 million on sales of $67.8 million for the same period in 2002.