Payless OKs $909-Million Buyout Offer

Payless Cashways Inc.’s directors on Thursday approved a $909-million offer from senior management to take the building supplies company private in a leveraged buyout.

Management will pay $27 a share in cash for the company’s 33.66 million outstanding shares, higher than the $26-a-share offer the group unveiled last week.

Payless spokeswoman Maureen Burgess said the higher offer resulted from “negotiations between the special board committee and the management group” and included the settlement of “certain litigation.”

The buyout was an apparent effort to discourage unwanted attention from New York investor Asher B. Edelman, who had built a stake in the company and indicated that he might be interested in making a formal takeover offer.

Edelman partner Corey Horowitz said his group is monitoring the situation carefully and awaiting details of the management offer before deciding “what the best course of action is.” He did not rule out making a takeover bid.

In trading Thursday on the New York Stock Exchange, Payless rose $1 a share to close at $26.50.

A special committee of independent directors and the Payless board approved the offer at a meeting at the company’s headquarters in Kansas City.