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VitaminShoppe.com (Nasdaq: VSHP) rose 7/16 to 3/4 on Wednesday after the vitamin e-tailer said its majority shareholder offered to acquire the shares it does not already own for US$1 in cash apiece.
The proposal from the shareholder group, VitaminShoppe Industries, Inc., is subject to board and shareholder approvals, as well as the signing of a definitive agreement and consent of the company's lenders. A special committee of directors is evaluating the proposal, the company said.
VitaminShoppe Industries owns about 64 percent of the New York-based e-tailer's outstanding common shares.
In November, VitaminShoppe reported third-quarter sales of $6.6 million, up from $3.7 million a year earlier but below the second quarter's $8.6 million, because of a plan to cut back on discounting and marketing initiatives. The company lost $6.5 million, or 32 cents per share, in the quarter ended September 30th, compared with $6.6 million in the year-earlier period.
President and chief executive officer Jeffrey Horowitz said the decline in revenue was driven by the decision "to reduce the scope of our overall promotional discounting and marketing initiatives."
Added Horowitz, "While these factors contributed to lower sales, we were able to conserve cash and improve our gross margin. In addition, as our company moved out of the development phase to an ongoing operation, we restructured and reduced our staffing requirements."
Horowitz also said the company was evaluating "alternatives to increase liquidity and otherwise create additional shareholder value."
VitaminShoppe shares are down from a 52-week high of 13 7/16.
The e-tailer sells vitamins, nutritional products, personal-care,
homeopathy and fitness products, and provides information about health.
