Spectrum's Empower lifts offer for Helen of Troy to $37 per share, all cash

The offer, the history, the ask

Spectrum Brands' home and personal care arm, Empower Brands Holdings, disclosed it has approached Helen of Troy more than once. The newest approach arrived Oct. 12 at $37 per share in cash, a non-binding proposal that values the target at roughly $866 million and implies close to a 30% premium versus where Helen of Troy traded then. Before that, Empower first floated a $34 per-share bid in August, which Helen of Troy rejected, according to Spectrum.

The company took its pitch public, saying, "We ask the Helen of Troy board of directors to engage with us in a constructive manner." It also added, "We also ask Helen of Troy shareholders to contact the company's board of directors and tell them that they support this transaction and want the company to engage with us."

How markets reacted

Helen of Troy's stock jumped about 20% to $35.57 at 9:40 a.m. in New York, the highest level in more than a year. At 9:58 a.m. Wednesday in New York, Spectrum Brands was up 10.3% at $93.76, putting its market capitalization at $2.16 billion.

What Spectrum says it wants to fix

Spectrum framed the move as a way to build a company with more leverage with retailers, where being bigger helps. According to Chief Executive Officer David Maura, Helen of Troy had offered little engagement to Spectrum and "has attempted to halt any process by requiring us to enter into an overly restrictive agreement that would limit our ability to communicate our offer to the Helen of Troy shareholders." He also said, "As Helen of Troy is currently comprised, it does not have the scale or the financial ability to acquire or achieve the scale to compete in a landscape that we know well." Helen of Troy's spokesperson did not provide a comment right away when asked.

The business mix and the numbers investors care about

Helen of Troy owns brands used at home, outdoors and in beauty, including OXO, Revlon, Hydro Flask and Osprey. For the fiscal year ended Feb. 28, it recorded $1.79 billion in sales and a net loss totaling $899 million. Before Spectrum's announcement, the stock had climbed about 40% this year, putting the company's market value at $691 million.

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Spectrum's portfolio includes Remington, FURminator and George Foreman, according to its website. Empower is co-owned by Oaktree Capital Management, following a transaction Spectrum made public in May in which Oaktree bought a 27% stake in Empower's home and personal care unit for $127 million.

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