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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) -
DECEMBER 4, 1998
GIANT GROUP, LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-4323 23-0622690
(STATE OR OTHER (COMMISSION FILE (I.R.S. EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION
INCORPORATION) NO.)
9000 SUNSET BOULEVARD, LOS ANGELES, CALIFORNIA 90069
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE - (310) 273-5678
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
On December 4, 1998, GIANT GROUP, LTD., a Delaware
corporation ("GIANT"), announced that it entered into an
Agreement and Plan of Merger, dated as of December 4, 1998 (the
"Merger Agreement") with Periscope Sportswear, Inc., a Delaware
corporation ("Periscope"), pursuant to which Periscope would
merge with and into a newly-formed, wholly-owned subsidiary (the
"Acquisition Sub") of GIANT in an all-stock transaction (the
"Merger"). Following the Merger, Acquisition Sub will be renamed
Periscope Sportswear, Inc. and will continue the business
currently conducted by Periscope. Pursuant to the Merger
Agreement, the holders (the "Periscope Stockholders") of
Periscope common stock immediately prior to the Merger will
receive 953,093 shares of Giant Common Stock, $.01 par value per
share. In addition, the Periscope Stockholders will be entitled
to receive in the aggregate up to an additional 225,000 shares of
GIANT Common Stock based upon the level of pre-tax profits of
Periscope for the fiscal year ending December 31, 1999. The
Merger is expected to close prior to December 18, 1998, subject
to entering into an agreement to prepay Periscope's outstanding
notes to BankBoston, N.A. and BancBoston Ventures, Inc. in an
aggregate principal amount of approximately $16.5 million, plus
accrued interest, and to customary closing conditions.
Periscope provides an extensive line of high-quality women's
and children's clothing in the moderate price category to major
retailers, primarily for sale under private labels.
After the Merger, Glenn Sands, the principal of Periscope
will continue as President and Chief Executive Officer of
Periscope and will become a member of the GIANT Board of
Directors.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release, dated December 4, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
GIANT GROUP, LTD.
By: /s/ William H. Pennington
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Name: William H. Pennington
Title: Vice President
Dated: December 7, 1998
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Exhibit Index
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Exhibit Description
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99.1 Press Release, dated December 4, 1998.
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FOR IMMEDIATE RELEASE
GIANT GROUP, LTD. ANNOUNCES AGREEMENT TO ACQUIRE PERISCOPE
SPORTSWEAR, INC.
December 4, 1998 - GIANT GROUP, LTD. (NYSE: GPO) announced today
that it has signed a definitive agreement to acquire Periscope
Sportswear, Inc. Under the terms of the agreement, GIANT will
issue 953,093 shares of its Common Stock in exchange for 100% of
the outstanding Common Stock of Periscope. The transaction was
approved by both Boards and is expected to close prior to
December 18, 1998.
Periscope provides an extensive line of high-quality women's and
children's clothing in the moderate price category to major
retailers, primarily for sale under private labels. The Company
is able to achieve attractive profit margins on its knit products
by controlling all aspects of its production process.
Approximately 80% of the Company's sales currently consist of
knit products. In addition to knit products, Periscope also
produces woven products and imports furnished knit and woven
products. The Company's products are sold nationwide through
department and specialty store chains including Charming Shoppes
(Fashion Bug), Cato Stores, and Goody's and through mass
merchants including Kmart, Montgomery Ward, Sears, Costco and
Kohl's. For the year ending December 31, 1998, Periscope expects
to achieve net sales of approximately $80 million. In May 1996,
Periscope completed an $18 million leveraged recapitalization
with BankBoston, N.A. and BancBoston Ventures, Inc. which will be
repaid at closing.
Burt Sugarman, Chairman and Chief Executive Officer of GIANT
stated "We are extremely pleased to welcome Periscope and its
founder, Glenn Sands to the GIANT family. As we have previously
disclosed, GIANT has been searching for an exciting, growth
oriented operating company for over two years. We now feel that
our patience has been rewarded. We are impressed at Glenn's
ability to grow Periscope's business over the course of many
years. We are confident that the combination of GIANT's strong
financial resources and Periscope's impressive track record and
reputation in its industry will result in superior stock growth
for our shareholders."
Glenn Sands, who has been in the apparel industry for over 20
years, said "We are very excited about our combination with GIANT
GROUP. GIANT's public company profile, financial resources and
management skills will substantially accelerate our growth plan.
The transaction will result in Periscope having virtually no debt
and will free our people to concentrate on growing the business
and pursuing select apparel related acquisitions."
Periscope intends to grow its business by increasing sales to
existing customers, expanding the Company's customer base,
broadening its ladies and children's product offerings.
Periscope's operating strategy consists of the following key
elements:
. Periscope purchases raw materials and produces goods
only upon receipt of a firm commitment from a customer.
Once a product is shipped to a customer, Periscope
generally does not accept returns unless the product is
defective or delivered late. These practices minimize
Periscope's need to carry unsold inventories.
. Periscope's products are updated versions of timeless
basics, recurring styles that have a proven record of
sales success with its customers. This practice allows
Periscope to avoid the risks associated with more
leading edge fashion lines while still capturing
relatively higher gross profit margins compared to more
generic apparel products priced on a commodity basis.
. Periscope does not own any manufacturing factories and
outsources the majority of its production, principally
to a series of contractors located in Mexico with whom
Periscope has had long standing relationships. In
addition, Periscope maintains control over the entire
production process of it's products, which enables it
to tailor products to a customer's specific needs,
offer customers rapid order turn around time, maximize
fabric yields by knitting fabrics to its own
specifications and maintain higher standards of quality
control.
The Private Securities Litigation Reform Act of 1995 provides a
"Safe Harbor" for forward-looking statements. Certain
information included in this press release (as well as
information included in oral statements or other written
statements made or to be made by GIANT) contains statements that
are forward-looking, such as statements relating to plans for
future activities. Such forward-looking information involves
important risks and uncertainties.
For further information contact:
Glenn Sands
President and Chief Executive Officer
Periscope Sportswear, Inc.
Today Only 310-273-5678. From December 7th on 201-662-1811
Burt Sugarman
Chairman of the Board and Chief Executive Officer
GIANT GROUP, LTD. 310-273-5678
