American Apparel’s board believes a bid by Irving Place Capital to buy the retailer for up to $1.40 per share is far too low and any takeover offer should be “several multiples” higher, a source said.
While the board has yet to evaluate the bid formally and is not likely to reach a decision until early January, it is not actively soliciting offers, the source added.
With a new chief executive in place, the retailer – known for its provocative clothing ads – is focused on raising sales and cutting costs after a battle to fire its founding chief Dov Charney ended last week.
American Apparel, which has a store in Leeds, suspended Charney six months earlier for allegedly misusing company funds and helping spread nude photos of a former employee on the internet.
“This is the worst time imaginable to sell the company as it is on the verge of turning around and realising its true value,” the source said.