The Weiss family, successors to the founder of American Greetings Corp. (Cleveland), has finalized a deal to buy the gift card company and take it private.
The offer has been valued at about $878 million. Shareholders excluding the family will receive $18.20 per share in cash, plus an additional 15-cent dividend if the deal closes in July, as planned.
While American Greetings has always considered its greatest competition to come from Hallmark Cards Inc. (Kansas City, Mo.), the greatest threat to its business is now said to be coming from Internet commerce, and revenue has declined by about 14 percent over the past 10 years. More recently, it has been hurt by costs related to the June 2012 bankruptcy of its British distributor, Clinton Cards Plc (Loughton, U.K.), which failed to repay a $54 million loan it had received from American Greetings.
American Greetings, which also sells party products and whose brands include Carlton Cards and Gibson, reported a loss of $809,000 in the third quarter ended Nov. 23, 2012, compared with a year-earlier profit of $20.2 million.
The Weiss family and affiliates control more than 50 percent of the company's voting shares. The bidding group included ceo Zev Weiss, chairman Morry Weiss and coo Jeffrey Weiss.