They've been part of our lives forever with brands we all know, like Carlton Cards and Papyrus. But the 100-year-old, mostly family-owned American Greetings Corp. has been struggling. In June, the company announced a first-quarter drop in profits for the fiscal year by 78 percent, caused in large part by charges related to the bankruptcy of Britain's Clinton Cards PLC, the largest greeting card company in the UK.
American Greetings acquired 400 Clinton Cards stores, as well as its brand, and Clinton Cards was one of its biggest customers.
Now, the financial woes of the 100-year-old, Cincinnati-based American Greetings Corp. may be over. The Associated Press reported today that on Tuesday brothers Zev and Jeffrey Weiss, the company's CEO and COO respectively, made an offer to buy its 33.8 million outstanding shares of common stock, a deal valued at approximately $581 million, and take the company private.
The market reacted positively: share prices jumped $2.14 early Wednesday, representing a 15 percent increase to $16.48 per share. Still, according to the AP the stock is down 24 percent from its 52-week high of $21.68 one year ago.
The brothers represent a group that includes other members of the Weiss family, who make up a large part of senior management (their father Morry Weiss is chairman), as well as other shareholders. The AP also reported that a spokesperson for American Greetings said it will not comment on the possible transaction until the deal has been accepted or rejected, a decision most likely be made based on the recommendations of a newly established committee of independent directors.
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