New Demands Cited : Warsaw Brothers Abandon Bid for MacGregor

A week after presenting a plan to take over MacGregor Sporting Goods Inc., the operators of Sports Specialties Corp. in Irvine decided Tuesday to drop their bid.

James H. Warsaw said new demands by MacGregor’s chairman made the purchase “less attractive” to a group headed by him and his brother, Robert A. Warsaw. Robert is chairman and James is president of Sports Specialties, makers of Pro brand baseball caps.

“He brought up new provisions that would complicate, stall and make less attractive our proposal,” Warsaw said. He would not divulge what those new provisions were.

Though he said the proposal was “dead,” he left open the possibility that he and his brother might challenge any deal MacGregor makes with another suitor and launch a tender offer.

MacGregor’s chairman, Frederic H. Brooks, could not be reached for comment Tuesday. On Monday, he said that he was holding discussions with several bidders.

MacGregor, one of the oldest and most prominent names in athletic equipment and clothing, filed a petition in mid-March for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. It had lost more than $22 million in the last 2 fiscal years, ended July 31, and was believed to be running out of capital.

The company’s recent regulatory filing stated that low amounts of capital had hampered its ability to manufacture and distribute its products.

Brooks, MacGregor’s largest shareholder with 25% of of the stock, would have received $3.25 million from the Warsaw brothers in their proposal to pay $1.75 per share for the stock, including warrants and stock options. The brothers are the second largest shareholders in MacGregor with a combined 8% stake.