Chinese Wholesaler Takes Stake in Furniture Brands
St. Louis, MO, October 2, 2007--Shares of Furniture Brands International Inc. climbed 35% Monday after an investor group said it has taken a nearly 15% stake in the company.
In a filing with the Securities and Exchange Commission, Hong Kong-based Samson Holding Ltd. and its affiliates reported owning a 14.9% stake in Furniture Brands.
Furniture Brands produces and markets products under names such as
The Samson group said it "may consider various alternative courses of action and take any action deemed appropriate," including seeking to acquire control of the company or pursuing board representation.
The shareholders said they view Furniture Brands' shares as "an attractive strategic investment." Samson Holding is Furniture Brands' largest shareholder.
Samson Holding produces and markets a wide range of residential furniture under the brand names Universal Furniture, Legacy Classic and Craftmaster. Furniture Brands is a major customer.
Samson said it proposed a business combination with Furniture Brands in July, but the company declined to pursue a transaction at the time.
In a statement on its Web site, Furniture Brands said it previously requested additional information from Samson, "without which the board and its advisers have been unable to adequately evaluate the merits of Samson's indication of interest."
"Furniture Brands' board and management team believe that our business model has power and value over the long term," said Ralph Scozzafava, vice chairman and chief executive officer. "We believe our strategic plan, which focuses on the company's brand power, strong retail position, and operational leverage, puts Furniture Brands in an excellent position to deliver strong long-term returns to all of our shareholders."
Furniture Brands has struggled with the declining housing market. In August, the company reported a 66% drop in second-quarter profit. Earlier this month, Furniture Brands said its third-quarter loss would be larger than previously expected, due to a continued soft business environment and weak order flow.