Geeknet says new offer from unnamed bidder is ‘superior’
A bidding war may be brewing for Fairfax-based online retailer Geeknet Inc.
The company said Friday that its board of directors had determined a $20 a share takeover offer received the day before was better than the deal it had signed on May 25 with California-based retailer Hot Topic Inc. Under the Hot Topic agreement, Geeknet had accepted an offer of $17.50 a share.
Geeknet has not disclosed the identity of the “strategic acquirer” making the higher bid. The Fairfax company said the new offer would remain in effect until 9 a.m. Tuesday.
Hot Topic has the option of matching or topping the new offer before 9 a.m. on Monday.
Under the Hot Topic merger agreement, Geeknet would be required to pay a 3 percent break-up fee if its board scraps the current deal in favor of the new proposal. The anonymous bidder, however, has agreed to reimburse Geeknet for the break-up fee.
Hot Topic, which has 650 stores in the U.S. and Canada, is owned by the New York-based private equity firm Sycamore Partners Management LLC.