American Greetings (AM) Acquires Clinton Cards in $56M Deal
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Price: $14.03 +0.65%
Overall Analyst Rating:
NEUTRAL (
Up)
Dividend Yield: 11.8%
Revenue Growth %: +5.7%
Overall Analyst Rating:
NEUTRAL (
Up)Dividend Yield: 11.8%
Revenue Growth %: +5.7%
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American Greetings Corporation (NYSE: AM) has acquired all of the outstanding senior secured debt of Clinton Cards PLC for approximately $56 million (approximately 35 million pounds Sterling) through a subsidiary in the United Kingdom.
Separate from the recently acquired senior secured debt, American Greetings has approximately $25 million of unsecured exposure to Clinton Cards, a majority of which is now in default. There have been repeated discussions with Clinton Cards since September 2011 concerning issues with our on-going supplies to it. Despite this, Clinton Cards has defaulted in respect of numerous payment obligations under our supply arrangements and we have recently stopped shipping product to Clinton Cards. In light of its financial distress, we believe that other suppliers have also recently stopped shipping product to Clinton Cards. As a result of its failure to pay amounts owed to us, together with the current state of its business, we expect that a portion of our unsecured exposure from Clinton Cards may be impaired.
Separate from the recently acquired senior secured debt, American Greetings has approximately $25 million of unsecured exposure to Clinton Cards, a majority of which is now in default. There have been repeated discussions with Clinton Cards since September 2011 concerning issues with our on-going supplies to it. Despite this, Clinton Cards has defaulted in respect of numerous payment obligations under our supply arrangements and we have recently stopped shipping product to Clinton Cards. In light of its financial distress, we believe that other suppliers have also recently stopped shipping product to Clinton Cards. As a result of its failure to pay amounts owed to us, together with the current state of its business, we expect that a portion of our unsecured exposure from Clinton Cards may be impaired.
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