Quiksilver set to dump Rossignol for $147.6 million

Shares of clothing and shoe maker Quiksilver Inc. rose more than 11 percent Wednesday after the company announced it will sell its Rossignol ski gear business for less than half the price it paid to acquire it three years ago.
A group led by Chartreuse & Mont Blanc, which is run by former Rossignol CEO Bruno Cercley, made an offer to buy the unit for $147.6 million (100 million Euros).
Quiksilver first bought Rossignol in 2005 for $320 million and has wanted to sell it to focus on its namesake brand as well as Roxy and DC.
"It was a problem from the beginning," Jeff Mintz, an analyst with Wedbush Morgan Securities in Los Angeles told The Los Angeles Times on Wednesday.

Shares of clothing and shoe maker Quiksilver Inc. rose more than 11 percent Wednesday after the company announced it will sell its Rossignol ski gear business for less than half the price it paid to acquire it three years ago.
Shares rose 88 cents, or 11 percent, to $8.64.
A group led by Chartreuse & Mont Blanc, which is run by former Rossignol CEO Bruno Cercley, made an offer to buy the unit for 100 million euros ($147.6 million). The offer consisted of 75 percent cash and 25 percent debt.
Chartreuse & Mont Blanc is owned by the Australian financial services company Macquarie Group.
Quiksilver first bought Rossignol in 2005 for $320 million and has wanted to sell it to focus on its namesake brand as well as Roxy and DC.
"It was a problem from the beginning," Jeff Mintz, an analyst with Wedbush Morgan Securities in Los Angeles told The Los Angeles Times on Wednesday. "It's a very different business, the hardgoods business compared to apparel. The truth is that it was a bit of a stretch for Quiksilver."
Citigroup analyst Kate McShane said in a research note the sale price is "roughly in-line" with her expectations, and noted that the deal comes six months after management put the business back up for sale, amid speculation that a sale would not occur.
However, she maintained a "Hold" rating and $10 price target on the stock, noting that she still sees challenges in apparel manufacturing through the rest of 2008, particularly from ongoing U.S. macroeconomic pressures and a potential slowdown in Europe.
Quiksilver is scheduled to report its fiscal third-quarter financial results on Sept. 4th after the market close.
"Quiksilver certainly didn't get the price for it that they would have hoped for," Mintz told the Times. "But I think in the end they're better off."

— The Associated Press