Wednesday, June 24, 2015

Martha Stewart Living Hustled Off For Over $300 Million



I can only imagine the day someone came to me and offered me, Nosee Rosee, millions for my brand. Yeah, I can only imaging...for now. But how sweet or bitter sweet could it be to hand over your lucrative brand you built from the ground up? Let get into this deal Martha Stewart  is set to close in the second half of this year for $353 million dollars...and IF it is worth it.

Sequential Brands Group acquired Martha Stewart Living Omnimedia with the idea to reinvent the lifestyle company whose sales have fallen drastically within the past few years from the billions it was once worth. Spearheading this deal is Yehuda Shmidman who has stake in companies like Jessica Simpson, Linen 'n Things, Ellen  Tracy and Justin Timberlake's clothing line Williams Rast.

With this deal Shmidman is technically Stewart's boss although Martha will be the brand's chief creative officer, as well as a shareholder and sit on the board of directors. Meaning she will have somewhat of a say in the brand she created and once owned.

From the looks of things Shmidman's branding and licensing company is coming in to save the company that is probably simply lacking a current youthful approach which may explain the massive decline in sales. Stewart's magazines Martha Stewart Living and Martha Stewart Weddings were outsourced to magazine publisher Meridith last year and her talk show The Martha Stewart Show was cancelled in 2012. What will Martha do next...or better yet what will Gwyneth Paltrow do next?

What do we think, is this a good deal for the 73-year-old lifestyle maven? She will NOT walk away with the $300 million in her pockets but as I stated she will still have somewhat of a say in how her brand is controlled.

Today, the home-entertainment queen controls 27.1 million shares of Martha Stewart Living Omnimedia, which will have a value of $166.7 million at $6.15 a share. Stewart controls an estimated 46 percent of the common stock.
The leaves just $187 million for the rest of the shareholders.
Michael Kupinski, an analyst who follows MSO, said he felt the $6.15 a share offer from Sequential was “too low” and said he hopes for a sweetener to the deal.- Source

Deal or no deal?

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