Cluett, Peabody Rejects Offer by 2 Investors

Apparel manufacturer Cluett, Peabody & Co. on Thursday rejected a $40-per-share offer to buy the New York-based firm made by California investors Paul Bilzerian and William Brodovsky, who vowed to “vigorously pursue a transaction designed to acquire the company.”

Bilzerian and Brodovsky, who own 9.9% of Cluett’s stock, sent a letter last Friday to Cluett’s board offering to buy the remaining shares for $40 each, half in cash and half in securities.

Cluett Chairman Henry H. Henley Jr. said in a letter to the investors that, after reviewing the merger offer, “I wish to inform you that management and the entire board of directors have absolutely no interest in pursuing your proposal.” No Cluett spokesman was available for comment.

Evaluating Alternatives

Cluett manufactures and markets apparel for men, women and children under several labels, including Arrow, Halston, Gold Toe and Burberrys.

Bilzerian said in a statement that he and Brodovsky consider their proposal to be “fair and in the best interests of all the company’s shareholders.” The partners are evaluating various alternatives, “including the feasibility of an all-cash tender offer,” Bilzerian said.

David Tallant, an attorney for Bilzerian and Brodovsky, said his clients want to buy Cluett because it’s a “good business decision on their part.” Tallant declined to discuss his clients’ other holdings.

A separate investor group in Dallas, which also owns 9.9% of Cluett, said it would “continue to review the alternatives available to our group” and would study Cluett’s rejection of the Bilzerian and Brodovsky offer.