CSC Generation offers to buy Bassett Furniture for $21 a share -letter

Flexsteel Industries

11/10/2022 13:00

By Svea Herbst-Bayliss
       NEW YORK, Oct 11 (Reuters) - Retail sector holding
company CSC Generation Inc wants to buy Bassett Furniture
 BSET.O  for roughly $191 million and is offering a 27% premium
to take the company private, according to a letter seen by
Reuters.
    CSC Generation, one of Bassett's top ten shareholders with a
with a 2% stake at the end of June, made the offer to buy the
home furnishings retailer for $21 a share in cash late last
month.
    "We believe transformation is needed at Bassett and that a
successful outcome can only be executed as a private business
with the additional resources of a digitally native owner," the
letter said. CSC general counsel Elizabeth Brown wrote the
letter dated Oct. 11 to the Bassett board.
    Bassett's share price has fallen roughly 10% in the last 52
weeks and has lost almost 60% of its value in the last five
years, prompting CSC, whose brands include Sur La Table and One
Kings Lane, to approach the company.
    "We believe that the company's stock has traded at a
substantial discount to its true value for the past four years
and will continue to trade below its intrinsic value if it
remains publicly listed," Brown added in the letter.
    CSC has spent the last several months trying to engage with
Bassett's board, Brown said in the letter.
    A representative for Bassett was not immediately available
for comment.
    CSC Generation was founded six years ago by Justin Yoshimura
and has used its digital capabilities and improved operations at
store and catalog retailers to build methods of shopping that
include online, in-store and phone purchases. 
    The investor is intent on receiving a fair evaluation of its
offer and said it would "take any action necessary" to achieve
its goal. Last month, it was rebuffed by smaller furniture
company Flexsteel Industries  FLXS.O , which it wanted to buy
and whose stock price has tumbled more than 10% since the
company announced plans to reject CSC.
    Mergers and acquisition activity has slowed as financing
conditions have tightened in the wake of high inflation, rising
interest rates and a more uncertain outlook for growth. Global
dealmaking slowed to 210 deals completed in the third quarter,
compared with 264 deals in the same quarter a year ago,
according to data from consulting firm Willis Towers Watson.
 (Reporting by Svea Herbst-Bayliss; editing by Uttaresh.V)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))