Dylex under review, businesses up for sale
Last Updated: Friday, November 10, 2000 | 11:48 PM ET
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The potential sale is part of a "review of strategic alternatives" involving all of Dylex's businesses, the company said in a release.
Board Chairman William Anderson will manage the review process.
The company had previously announced a split in its operations that would see its discount department store BiWay spun off as a separate company.
Now the board says a total sell-off may be a better option as it believes "the sum of the value of the individual businesses is worth substantially more than the current market capitalization."
- ARCHIVED STORY: Dylex splitting, BiWay to take the highway
Also on Tuesday, Dylex announced the resignation of CEO Elliott Wahle.
Wahle will remain with the company until the end of the fiscal year, Jan. 31, 2000, but he declined the board's offer to have him see the company through this review.
Anderson, who will take over the positions of president and CEO, said Wahle told the board he wanted to move on.
When the BiWay spin-off was announced in October, the aim was to provide greater shareholder value, but there was no estimate of how much shareholders could expect to earn.
Two years ago Dylex stock was trading at $9 a share but now it's down to $1.73 per share -- a 52-week low.
Media reports have suggested so-called "catalyst" investors, possibly including Dylex stakeholder Crescendo Partners, have been buying Dylex stock and putting pressure on the company to take action.
In October Eric Rosenfeld of Crescendo Partners said he couldn't publicly confirm any involvement with Dylex.
Anderson -- himself considered one of the "catalyst" investors -- says the full review will help realize more value for Dylex shareholders. It's better value he's been pushing for for five years.
"The board will take all steps necessary during this review process to ensure that our shareholders are able to realize the underlying value of these assets," Anderson said.
Dylex has 648 stores across Canada. The apparel stores put up for sale Tuesday have combined sales of more than $500 million a year.
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