Skullcandy To Carefully Review Mill Road Capital's $6.05/share Takeover Proposal

(RTTNews) - Skullcandy, Inc. (SKUL), which is in merger agreement to be acquired by Incipio LLC for $5.75 per share in cash, announced Monday that its board of directors has received on Friday an unsolicited takeover proposal from Mill Road Capital.

Mill Road proposal to acquire the shares of Skullcandy common stock for $6.05 per share in cash is conditioned on its completion of due diligence, obtaining financing and other matters.

Skullcandy, which owns Skullcandy and Astro Gaming brands, said its board of directors, in consultation with its financial and legal advisors, will carefully review and consider the Mill Road Capital proposal to determine the course of action that it believes is in the best interest of the Company and its stockholders.

The company on June 23 had agreed with Incipio LLC to be acquired in a total of approximately $177 million deal. The merger agreement provides for a "go-shop" period until July 23, during which time Skullcandy is actively soliciting alternative proposals from third parties to acquire the company.

While soliciting alternative proposals to the transaction with Incipio, both companies are continuing to work towards completion of their transaction in the event that no superior transaction materializes.

There can be no assurance that the proposal or discussions with Mill Road Capital, or any other third party, will result in in a superior transaction to the merger agreement entered into with Incipio, the company added.

Peter J. Solomon Co. is acting as financial advisor and Latham & Watkins LLP is acting as legal advisor to Skullcandy.

Separately, Skullcandy announced that it has approved the adoption of a shareholder rights plan. Under the plan, one preferred stock purchase right will be distributed for each share of common stock held by stockholders of record on July 8. The rights plan is scheduled to expire on June 26, 2017.

Skullcandy shares on last Friday had gained around 23 percent.