Pepperell Will Buy Stevens, Sell Part to Rival

J. P. Stevens & Co. has agreed to be acquired for $1.22 billion by West Point-Pepperell Inc., which plans to split the textile giant’s assets with a partner and a rival bidder.

Pepperell, which made its bid in conjunction with NTC Group, said Monday that it will pay $68.50 in cash for each of Stevens’ 17.8 million shares outstanding under terms of deal forged over the weekend.

The West Point, Ga.-based Pepperell will sell $530 million in Stevens assets to the New York investment firm Odyssey Partners, its rival in the lengthy takeover battle.

Pepperell will keep most of Stevens’ sheet and towel operations, boosting its share of the home fashion textile market to 25%, industry analysts said.

To satisfy previously announced antitrust concerns, Pepperell will sell some of those operations to a NTC subsidiary, Bibb Co. of Macon, Ga., for about $170 million.

“We would have liked to have gotten as much of (Stevens’) bed and bath business as possible, but because of meeting Federal Trade Commission requirements, we won’t be able to get all of it,” said Joseph L. Lanier, Pepperell chairman.

Odyssey, which had been vying with Pepperell to buy the 175-year-old Stevens, will get the company’s other operations, including its carpet and industrial fabrics plants.

Pepperell and Odyssey went three rounds in a heated auction before announcing last week that they would work together to draft a joint buyout proposal.

Stevens initially rejected their $1.22-billion offer because of concerns about the tentative nature of Odyssey’s financing, but the terms were revised over the weekend to Stevens’ satisfaction.

In trading on the New York Stock Exchange on Monday, Stevens stock rose 25 cents to close $67.75 a share.

Pepperell’s interest in Stevens has centered exclusively on the company’s sheet and towel operations, which include state-of-the-art manufacturing facilities as well as top designer brand names. Those operations account for 60% of Stevens’ $1.61 billion in annual sales.

Among the major brand names in Stevens’ towel and sheet arsenal are Ralph Lauren, Laura Ashley, Gloria Vanderbilt, Perry Ellis, Pierre Cardin and Givenchy. Pepperell’s brands include Arrow, Martex, Lady Pepperell and Burberry.

Headquartered in New York, Stevens employs more than 23,000 people, most of whom work in the southeastern United States.

Pepperell’s Lanier said he did not anticipate any layoffs at the factory level, but he said “few, if any employees would be needed at the corporate level.”

Odyssey’s share includes 26 plants that employ more than 9,000 workers with annual revenue in excess of $750 million. Pepperell will acquire 15 plants, and Bibb will get eight plants.

Further details were not available.