Clothing retailer American Apparel says it is considering buyout bid; shares jump

MarketsAssociated Press

Shares of American Apparel Inc. jumped 7 percent Monday after the retailer said it received an offer to buy the company.

The Los Angeles company said it was offered between $1.30 and $1.40 per share. That's as much as a 31 percent premium from Friday's close of $1.07.

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American Apparel said it will evaluate the offer, but did not disclose the name of the potential buyer. Sunday it said it adopted a shareholder rights plan, also known as a poison pill, which goes into effect if an investor acquires 10 percent or more of the company.

The offer comes after American Apparel fired founder Dov Charney last week and named fashion executive Paula Schneider as its next CEO as it seeks to turnaround its business. Charney was ousted as CEO in June following allegations of misconduct.

American Apparel also said Monday that Allan Mayer and David Danziger stepped down as co-chairmen of the board and will be replaced by board member Colleen Brown.

Known for its risque advertising and clothes made in Los Angeles, American Apparel has about 245 stores around the world.

Its shares rose 8 cents, or 7.5 percent, to $1.15 in morning trading Monday.