Fashionmall.com (Nasdaq: FASH) rose 9/32 to 2 7/16 Monday after Internet holding company Sitestar Corp. offered to buy the company for $3 per share, or $22.5 million.
Fashionmall chief executive officer Benjamin Narasin, however, said he told Sitestar he was “not interested” in the offer. Narasin, who owns 46 percent of Fashionmall’s outstanding common stock, also said he was “skeptical” about the offer. Sitestar, he said, made a similar offer for MotherNature.com (Nasdaq: MTHR) in August, then withdrew it this month.
New York City-based Fashionmall said it has preliminarily reviewed Sitestar’s offer, and asked shareholders to defer making a decision to accept or reject any tender offer from Sitestar until hearing the Fashionmall board’s position on the offer.
Sitestar president and chief executive officer Clinton Sallee said his company is offering Fashionmall shareholders a significant premium over their stock’s price. Fashionmall shares are down from a 52-week high of 82 1/4, set in November. The shares tumbled to a 52-week low of 1 3/4 in August.
“Fashionmall.com is attractive from both a strategic and financial perspective,” said Sallee. “We see long term growth potential in their Internet assets and brand value. Our financing is in place, and we are seeking management’s support for this transaction.”
Fashionmall bought failed UK e-tailer Boo.com, and plans to reopen the site on October 30th. Boo, one of the earliest and most spectacular e-tail failures of the year, will come back using many of the hallmarks and technology that made the site a standout, Fashionmall said. Boo’s founders, however, went through $120 million in just over a year, and subsequently ran out of funding.
Sitestar said it withdrew its offer to Mothernature.com because of lack of cooperation from management.