Newcastle Ups Whitehall Offer to $1.50 per share

Newcastle Partners, L.P. is not giving up on its plans to take over U.S. jewelry retailer Whitehall Jewellers. Newcastle has increased its offer from $1.20 per share to $1.50 per share for all of the outstanding shares.

Newcastle, which already holds a 14.46 percent stake in the ailing jeweler, announced its improved offer yesterday (Wednesday), its third offer for the company. The first offer of $1.10 per share was made in late October.

“Newcastle Partners determined to increase its offer price based on its review and analysis of certain limited due diligence information received from Whitehall over the past several days,” the company said in a release.

“In addition, Newcastle Partners is engaged in the process of securing a commitment letter from a nationally-recognized institution familiar with Whitehall. The new senior lender is experienced in the retail jewelry industry and would replace Whitehall's current senior lenders upon closing of the Newcastle transaction,” it added.

Mark Schwarz, the managing member of Newcastle Partners, stated: "We believe that this offer provides Whitehall's shareholders with a clearly superior alternative to the Prentice transaction recommended by the Board of Directors by providing immediate liquidity to shareholders at a significant premium to market. With the elimination of many of our Tender Offer's conditions as described in this press release, other than the closing of replacement senior financing, the majority of the remaining conditions are now in the control of the Board of Directors.”

In late December Whitehall’s board rejected Newcastle's previous bid, recommending an offer by Prentice Capital Management. On October 4, the company announced its entry into agreements with funds managed by Prentice and Holtzman Opportunity Fund, L.P.

Newcastle has extended its tender offer for all of Whitehall’s common stock to January 27. The tender offer was previously set to last night (Wednesday). As of the close of business on January 3, a total of 3,303,554 shares had been tendered in and not withdrawn from the offer.