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Sun Capital proposes acquisition of Furniture Brands

Promises “substantial premium” to stock price

Heath E. Combs -- Furniture Today, February 21, 2008

ST. LOUIS — Sun Capital Securities Group said in a letter to Furniture Brands International officials Wednesday that it was interested in acquiring the furniture importer and manufacturer.

The Boca Raton, Fla.-based private equity group said it would pay a substantial premium to its latest closing stock price of $10.18 per share and its 30-day average price of $8.95 per share.

Sun Capital is the third largest FBI shareholder with a 9.4% ownership stake. Sun Capital has been a shareholder since January 2007.
 
Hong Kong-based Samson Holding Ltd. has a 14.9% ownership stake in Furniture Brands made an offer on FBI last year in July that was rejected.

“We believe Sun Capital and other shareholders have the right to decide between Furniture Brands’ turnaround strategy and realizing a substantial buyout premium that delivers compelling and immediate value, particularly on a risk adjusted basis,” the letter said.
 
“Given our investments in the furniture industry, Sun Capital and Samson’s interest in Furniture Brands suggests that at least two strategic buyers appear poised to provide shareholders a substantial premium in the context of a buyout,” it stated.

The letter stated the company’s preference is for management to retain their leadership roles under Sun Capital’s ownership.

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