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Independent firms favor Apax-rue 21 deal

BY Dan Berthiaume

Warrendale, Pa. – Two independent proxy voting advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis & Co., have both recommended that rue21 shareholders vote for a proposed acquisition by Apax Partners. As previously announced on May 23, 2013, rue21 entered into a definitive agreement under which funds advised by Apax Partners will acquire all outstanding shares of rue21 for $42 per share in cash.

The SKM II funds, which collectively own approximately 30% of the outstanding shares of rue21, have entered into a support agreement to vote their shares in favor of the transaction with Apax Partners. The transaction with Apax Partners is subject to approval of stockholders, including a majority of the rue21 stockholders unaffiliated with the SKM II funds and certain other specified stockholders, as well as other customary closing conditions.

A special meeting of rue21’s stockholders to consider and vote on the acquisition is scheduled to be held on Sept. 19 at the company’s headquarters in Warrendale. rue21 stockholders of record as of the close of business on Aug. 5, 2013 will be entitled to vote.

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NRF: Retail import volume grows ahead of holidays

BY Dan Berthiaume

Washington, D.C. – Import volume at the nation’s major retail container ports is expected to grow 5.1% in September over the same month last year as retailers head into the holiday season. U.S. ports followed by the monthly Global Port Tracker report, released today by the National Retail Federation and Hackett Associates, handled 1.43 million Twenty-Foot Equivalent Units (TEUs) in July, the latest month for which after-the-fact numbers are available.

That was a 5.4% increase from June and up 1.1% from July 2012, and follows year-over-year declines in three of the four previous months. One TEU is one 20-ft. cargo container or its equivalent. August was estimated at 1.48 million TEU, up 4.1% from last year. September is forecast at 1.48 million TEU, up 5.1%, October at 1.46 million TEU, up 9%; November at 1.31 million TEU, up 2.2%; and December at 1.3 million TEU, up 0.7%. January 2014 is forecast at 1.33 million TEU, up 1.9% from January 2013.

The total for 2013 is forecast at 16.2 million TEU, up 2.5% from 2012’s 15.8 million TEU. The first six months of 2013 totaled 7.8 million TEU, up 1.2% from the first half of 2012.

“The U.S. economy is on the road to sustained growth,” Hackett Associates founder Ben Hackett said. “Second-quarter GDP was well above expectations and surprised most forecasters, the unemployment picture is improving, and we believe consumer confidence will translate into increased sales during the fourth quarter.”

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Neiman Marcus reaches $6 billion sale agreement

BY Dan Berthiaume

Dallas – Ares Management and the Canada Pension Plan Investment Board have reached an agreement to purchase Neiman Marcus for $6 billion from a group of investors led by TPG Capital and Warburg Pincus, the private equity firms that bought Neiman Marcus for $5.1 billion in 2005.

“We are delighted to join with CPPIB as a long-term investor in Neiman Marcus Group, a leading luxury retailer with global brand recognition that attracts shoppers from all over the world,” said David Kaplan, senior partner and co-head of the Private Equity Group of Ares. “We share a common vision with the company’s management team, led by its highly respected CEO Karen Katz, and together, we plan on investing meaningful capital into the business to ensure Neiman’s long-term position as the unparalleled leader in luxury retail.”

In a prepared statement, Kaplan also said the Neiman Marcus purchase fits Ares’ strategy of accelerating growth in retail and consumer companies. Ares and CPPIB will hold an equal economic interest in Neiman Marcus, and the company’s management will retain a minority stake. Neiman Marcus filed for an IPO in June, but there is no indication an IPO will take place following the purchase.

"On behalf of the entire management team, we are delighted to be joining with Ares and CPPIB to continue enhancing our strong brands by offering our customers the best edited merchandise assortments as well as delivering a superlative omnichannel shopping experience,” said CEO Karen Katz. “For the past eight years, TPG and Warburg Pincus have been valued partners whose investment has supported our growth and strengthened our brands."

The transaction is expected to close in the fourth quarter of 2013, subject to regulatory approvals and other customary closing conditions. Credit Suisse acted as financial advisor to Neiman Marcus Group, and RBC Capital Markets and Deutsche Bank Securities Inc. acted as financial advisors to Ares and CPPIB, all of which provided committed debt financing in connection with the transaction.

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