Converse Stock Soars as Interco Discloses Offer
The stock price of Converse Inc., a big name in athletic shoes, soared $10 a share to $26.75 in over-the-counter trading Thursday after Interco Inc., which makes and sells Florsheim shoes, disclosed that it holds a 9.6% stake in the company and has offered to buy it.
St. Louis-based Interco, which also manufactures apparel and Ethan Allen furniture, said it has bid $26 a share for Converse but is prepared to offer $28 a share if the Converse board acts quickly to approve a definitive agreement.
Initial Reaction ‘Favorable’
In North Reading, Mass., a Converse spokesman said the company had received an “oral proposal” of $28 a share. At that price, Interco would pay about $147 million for the shares that it does not hold.
Richard D. Loynd , chairman of Converse, said his initial reaction to the proposal is “favorable.” The board is expected to meet today.
John Horan, publisher of Sport Ink, a Yardley, Pa., newsletter covering the sports apparel industry, said that Converse’s earnings performance has been “atrocious” of late but that high interest in the company’s colorful canvas high-top sneakers is resulting in a turnaround.
“They’ll make good money this year,” he said.
The company has the third-largest share of the U.S. branded athletic footwear market.
