Kellwood rejects (second) buyout bid

St. LOUIS (AP) Apparel maker Kellwood has rejected a $543.9 million buyout offer from Sun Capital Securities Group on Tuesday.

This is the second time in one month Kellwood has rejected the investment firm's proposal.

Sun Capital, which owns a 9.9% stake in Kellwood, first made its bid of $21 a share in September. Kellwood's board rejected it in October, saying the offer undervalued the company and was not in the best interest of shareholders.

On Monday, Sun Capital reaffirmed its same proposal and said it was prepared to take the offer straight to shareholders.

Kellwood, however, is standing by its previous decision.

"The Kellwood board strongly believes in the company's ability to successfully execute its strategic plan and provide greater value to its shareholders than Sun Capital's proposal," Kellwood said in a written statement.

Kellwood shares rose $1.85, or 11.2 %, to close at $18.36 Tuesday. But that is still about 19 percent below the price Sun Capital is offering. Kellwood has traded in a 52-week range of $14.21 to $34.84.

Earlier this month, Kellwood announced plans to sell its Smart Shirts business and related real estate assets in separate deals generating a combined $161 million. Proceeds will be used to repurchase shares and reduce debt.

Kellwood is one of the nation's largest apparel makers with branded and private-label products. The brands it owns include Sag Harbor and Phat Farm, while it produces clothing under licensing agreements for brands that include Calvin Klein and Claiborne.