FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: April 8, 1996
(Date of earliest event reported)
ANNTAYLOR STORES CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-10738 13-3499319
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(State or other (Commission File Number) (IRS Employer
jurisdiction of incorporation) Identification No.)
142 West 57th Street
New York, New York 10019 10019
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 541-3300
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Item 5. Other Events.
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On April 8, 1996, AnnTaylor Stores Corporation, a Delaware corporation
(the "Company"), announced that it had entered into an Agreement in Principle
(the "Agreement in Principle") with Cygne Designs, Inc., a Delaware corporation
("Cygne"), regarding the proposed acquisition (the "Acquisition") by the Company
of (i) Cygne's entire interest in the Company's direct sourcing joint venture
with Cygne, known as CAT US, Inc. and C.A.T. (Far East) Limited, and (ii) the
assets (the "Assets") of Cygne's AnnTaylor Woven Division that are used for
sourcing merchandise for Ann Taylor.
As consideration for the Acquisition, the Company will issue to Cygne
shares of common stock, par value $.0068 per share, of the Company (the "Common
Stock") having a market value of $36,000,000 (based on the market price during
the ten trading days prior to closing, but in no event more than 2.5 million
shares). The Company also will pay to Cygne cash in an amount equal to the
tangible net book value of the inventory and fixed assets included in the
Assets, less certain assumed liabilities. In addition, as part of the
transaction, the Company will assume the obligation to make payment to the
President of CAT of
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certain amounts due under his existing employment agreement with CAT as a result
of the Acquisition.
Consummation of the Acquisition is subject to the negotiation and
execution of a definitive stock and asset purchase agreement and the
satisfaction of various conditions. It is currently anticipated that the
Acquisition will close in July 1996, although there can be no assurance that the
transaction will be consummated or that it will be consummated within the
anticipated time frame.
The Company also announced on April 8, 1996 the commencement of an
offering under Rule 144A under the Securities Act of convertible trust
originated preferred securities by AnnTaylor Finance Trust, a statutory business
trust to be organized by the Company under the laws of the State of Delaware.
The convertible preferred securities will be convertible, at the option of the
holder, into shares of the Company's common stock. Consummation of the offering
with proceeds of at least $75 million (before initial purchasers' discounts and
commissions) is one of the conditions to the Acquisition.
The information set forth above is qualified in its entirety by
reference to a press release issued by the Company on April 8, 1996. A copy of
such release is at-
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tached hereto as Exhibit 1 and is incorporated herein by reference.
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Item 7. Financial Statements and Exhibits.
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(a) Financial statements of business acquired:
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Not applicable.
(b) Pro Forma financial information:
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Not applicable.
(c) Exhibits:
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1 Press release issued by the Company on April 8, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ANNTAYLOR STORES CORPORATION
By: /s/ Paul E. Francis
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Name: Paul E. Francis
Title: Executive Vice President-
Finance and Administration
Date: April 8, 1996
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EXHIBIT INDEX
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Exhibit Sequential
Number Description Page Number
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1 Press release issued by
the Company on April 8,
1996
EXHIBIT 1
ANNTAYLOR
NEWS RELEASE
142 WEST 57TH STREET NEW YORK, N.Y. 10019
FOR IMMEDIATE RELEASE
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ANN TAYLOR TO ACQUIRE CYGNE DESIGN'S INTEREST
IN CAT SOURCING JOINT VENTURE;
ANN TAYLOR ALSO ANNOUNCES PROPOSED
$75 MILLION FINANCING TRANSACTION
New York, New York, April 8, 1996 -- AnnTaylor Stores Corporation (NYSE:
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ANN) announced today that it has entered into an agreement in principle with
Cygne Designs, Inc. ("Cygne"), pursuant to which Ann Taylor will acquire Cygne's
entire interest in the Company's direct sourcing joint venture with Cygne known
as CAT U.S., Inc. and C.A.T. (Far East) Limited (together, "CAT"). Pursuant to
the agreement, Ann Taylor will also acquire the assets and assume certain
liabilities of what is known as the Ann Taylor Woven Division of Cygne, which is
the division of Cygne that is responsible for sourcing merchandise for Ann
Taylor. In fiscal 1995, Ann Taylor purchased approximately 38% of its
merchandise through CAT and an additional 16% of its merchandise directly from
Cygne.
The Ann Taylor Woven Division of Cygne includes approximately 65 employees
in New York as well as a smaller number of employees in foreign offices in Hong
Kong and Italy. The Company said that it intends to integrate the operations of
the Ann Taylor Woven Division with the operations of CAT, so that following the
acquisition, CAT will be a wholly owned subsidiary of Ann Taylor, responsible
both for the sourcing functions CAT currently performs for Ann Taylor and for
all of the sourcing functions for Ann Taylor currently performed by Cygne. The
Company said that the expanded CAT operation will continue to be led by CAT's
current President, Dwight Meyer.
The purchase price for Cygne's interest in CAT and the Ann Taylor Woven
Division assets will consist of shares of Ann Taylor common stock having a
market value of $36 million at the time of closing (provided that in no event
will Ann Taylor be required to issue more than 2.5 million shares) plus a cash
payment in an amount equal to the tangible net book value of the inventory and
fixed assets of the Ann Taylor Woven Division, less certain assumed liabilities
of the Division, plus an amount in respect of an obligation under an existing
employment agreement with CAT. At fiscal year end 1995, the total of such cash
payments would have been approximately $14.9 million.
Page 1 of 3 Pages
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Ann Taylor's Chairman and Chief Executive Officer, Sally Frame Kasaks,
said, "The acquisition of CAT and the Ann Taylor Woven Division of Cygne is an
important step in furthering our strategy of improving our merchandise offerings
by more closely integrating the processes of design, planning, merchandising and
sourcing. By combining CAT and the Woven Division of Cygne, we will be able to
leverage the respective strengths of each organization. The acquisition will
give us greater control over pre-production processes and production management,
which we believe will result in a variety of operational benefits."
The closing of the CAT/Cygne transaction is subject to various conditions,
including (i) negotiation and execution of a definitive acquisition agreement
and related documentation, (ii) the approval of the transaction by Cygne's
stockholders, (iii) the consent and release of liens by each of HongKong and
Shanghai Banking Corporation and certain other lenders to Cygne, (iv) the
continuation of CAT's existing $40 million credit facility by HongKong and
Shanghai Banking Corporation, its current lender, (v) receipt by Cygne of a
fairness opinion from its financial advisor, (vi) the consent of Ann Taylor's
lenders under its bank credit agreement and (vii) the consummation of the
offering by AnnTaylor Finance Trust of the convertible securities described
below. It is currently anticipated that the transaction will close in July 1996
following approval by Cygne's stockholders. There can be no assurance that
definitive documentation will be completed or any other conditions will be
satisfied, or that the transaction will be consummated.
Ann Taylor has agreed to register the shares to be issued to Cygne for
resale, although Cygne will be subject to certain restrictions on the timing of
sales (including the limitation that the shares will not be transferable until
30 days after the expiration of the lock-up period applicable to the financing
described below) and the amount of shares which can be sold at any one time.
The Company also announced today that it is seeking to raise $75 million
through the sale of convertible preferred securities to be issued by a financing
vehicle to be known as AnnTaylor Finance Trust, a Delaware business trust (the
"Trust"). The Trust will offer for sale convertible trust originated preferred
securities ("Convertible TOPrS") of the Trust, having an aggregate liquidation
preference of $75 million (with an option to purchase an additional $11.25
million of such securities to cover over-allotments). These securities will be
convertible at the option of the holders thereof into Ann Taylor common stock.
The convertible preferred securities will not be registered or required to
be registered under the Securities Act of 1933 and will be sold in the United
States and outside the United States in a private placement under Rule 144A and
Regulation S, respectively, and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
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The Company plans to use the proceeds of the financing to reduce borrowings
outstanding under the Company's revolving credit facility, without reduction of
the commitments thereunder. If the CAT/Cygne transaction is consummated, the
Company may re-borrow funds under the revolving credit facility to fund the net
tangible assets payment provided for under the agreement and related payments
and expenses of the acquisition. Consummation of the financing is subject to
market and other conditions, and there can be no assurance that the offering of
preferred securities will be consummated.
Ann Taylor is one of the country's leading women's specialty apparel
retailers, operating 308 stores in 40 states and the District of Columbia.
Contact: Jocelyn Barandiaran Gina Iaderosa
Investor Relations Marketing/Public Relations
212-541-3226 212-541-3347
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