Apollo Global Management to acquire Michaels for $5 billion

Craft retailer The Michaels Companies announced it has entered into a $5 billion deal to merge with affiliates of investment fund Apollo Global Management. (Incidentally, Apollo Global Management owns Shutterfly Inc.)

Under the terms of the agreement, Apollo will commence a tender offer to acquire all outstanding shares of Michaels for $22.00 per share in cash. The purchase price represents a 47-percent premium to the closing stock price on Feb. 26, 2021 (the last trading day prior to press speculation about a potential transaction involving Michaels) of $15.00 per share and a 78-percent premium to the 90-day volume-weighted average price. The merger agreement provides for a 25-day “go-shop” period, during which Michaels will actively solicit, evaluate and potentially enter into negotiations with and provide due diligence access to other parties submitting alternative proposals.

“The Company’s impressive growth transformation, including our financial and operational performance in the unprecedented environment of the pandemic, led to an unsolicited offer to buy the company,” said James Quella, chairman of the Michaels Board of Directors. “Following that offer, the board undertook a comprehensive process to test the market and to evaluate the value-maximizing path forward for shareholders. The Board of Directors, informed by that process, firmly believes Apollo’s offer represents a compelling value to our shareholders. It has been a privilege to work with Ashley and the management team as they coalesced around the transformation strategy, reimagined the Michaels omnichannel experience, and drove strong business outcomes in a challenging retail environment.”