-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KXkjshFIiExijN0c3V0hJVM9Oqon8fj7yaKwVA9JEdf4A6w7LdW+SJy2VWOFVmmt P9+faw2Qnx4tCXDUWfXsqA== 0001012975-07-000353.txt : 20070629 0001012975-07-000353.hdr.sgml : 20070629 20070629145330 ACCESSION NUMBER: 0001012975-07-000353 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20070629 DATE AS OF CHANGE: 20070629 GROUP MEMBERS: AQUAMARINE CAPITAL MANAGEMENT, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EVERLAST WORLDWIDE INC CENTRAL INDEX KEY: 0000934795 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 133672716 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-59797 FILM NUMBER: 07950314 BUSINESS ADDRESS: STREET 1: 1350 BROADWAY STREET 2: FLOOR 23 CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2122390990 MAIL ADDRESS: STREET 1: 1350 BROADWAY STREET 2: FL 23 CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: ACTIVE APPAREL GROUP INC DATE OF NAME CHANGE: 19941229 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Hidary Group Acquisitions, LLC CENTRAL INDEX KEY: 0001404491 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 10 WEST 33RD ST., 9TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10001 BUSINESS PHONE: 212-365-6500 MAIL ADDRESS: STREET 1: 10 WEST 33RD ST., 9TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10001 SC 13D/A 1 e9823786v2.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)* EVERLAST WORLDWIDE INC. ----------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.002 PER SHARE ---------------------------------------- (Title of Class of Securities) 300355104 --------- (CUSIP Number) Arnold J. Levine, Esq. Proskauer Rose LLP 1585 Broadway New York, NY 10036 (212) 969-3000 ----------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 28, 2007 ------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 300355104 1 Names of Reporting Persons Hidary Group Acquisitions, LLC I.R.S. Identification Nos. of above persons (entities only) ------------------------------------------------------------------------ 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) OO, BK - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 ------------------------------------------------- Number of 8 Shared Voting Power 1,517,305 Shares Bene- ------------------------------------------------- 9 Sole Dispositive Power 0 ficially Owned ------------------------------------------------- 10 Shared Dispositive Power 418,255 ------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,517,305 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [X] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 36.1% - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) OO - -------------------------------------------------------------------------------- 2 CUSIP No. 300355104 1 Names of Reporting Persons Aquamarine Capital Management, LLC I.R.S. Identification Nos. of above persons (entities only) ------------------------------------------------------------------------ 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC Use Only - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7 Sole Voting Power 0 ------------------------------------------------- Number of 8 Shared Voting Power 127,993 Shares Bene- ------------------------------------------------- 9 Sole Dispositive Power 0 ficially Owned ------------------------------------------------- 10 Shared Dispositive Power 127,993 ------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 127,993 - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [X] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 3.1% - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IA - -------------------------------------------------------------------------------- 3 This statement is filed with respect to the shares of common stock, $0.002 par value (the "COMMON STOCK") of Everlast Worldwide, Inc. (the "COMPANY"), beneficially owned by Hidary Group Acquisitions, LLC ("HIDARY") and Aquamarine Capital Management, LLC ("AQUAMARINE" and, together with Hidary, the "REPORTING PERSONS") as of June 29, 2007 and amends and supplements the Schedule 13D filed on June 24, 2007 and amended on June 28, 2007 (collectively, the "STATEMENT"). Except as set forth herein, the Statement is unmodified. ITEM 4. PURPOSE OF TRANSACTION Item 4 is amended by adding three paragraphs and replacing the last paragraph of Item 4 in its entirety with the fourth paragraph below: On June 28, 2007, Hidary received a notice from the Company that its Board had determined that the Acquisition Proposal of Brand Holdings Limited (the "BH PROPOSAL") continued to constitute a Superior Proposal and that the Company was terminating the Merger Agreement. On June 28, 2007, Hidary delivered a letter (the "June 28 Letter") to the Company stating that the Company is in breach of the Merger Agreement, and that it is Hidary's firm view that the Company was not entitled to terminate the Merger Agreement because it had not received a Superior Proposal, as defined in the Merger Agreement, since, for among other reasons, the consideration offered by Hidary on June 27, 2007 was more than $2.4 million higher in the aggregate than the consideration offered by Brand Holdings Limited. The June 28 Letter also contained a revised proposal (the "New Hidary Proposal") that provides for, among other things, an increase in the Merger Consideration from $30.55 per share to $31.25 per share and gives all the stockholders of the Company the right to roll up to 50 percent of their shares in the Company into the acquisition vehicle. A copy of the letter to the Company setting forth the New Hidary Proposal is attached to this amendment as Exhibit 99.18 to this Statement and is incorporated by reference herein. On June 29, 2007, Hidary issued a press release describing the New Hidary Proposal (the "Press Release"). A copy of the Press Release is attached as Exhibit 99.19 to this Statement and is incorporated by reference herein. The information set forth in response to this Item 4 is qualified in its entirety by reference to the Merger Agreement, the letter setting forth the Hidary Proposal, the June 28 Letter, the Press Release, the Voting Agreements, the Limited Guarantees, the Rollover Commitment Letters, the Interim Investors Agreement, the Equity Commitment Letters and the Debt Commitment Letters, each of which is filed as an exhibit hereto and is incorporated by reference. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The first paragraph of Item 6 is replaced in its entirety by the following: Each of the Merger Agreement, the letter setting forth the Hidary Proposal, the June 28 Letter, the Press Release, the Voting Agreements, the Rollover Commitment Letters, the Interim Investors Agreement, the Limited Guarantees, the Equity Commitment Letters and the Debt Commitment Letters (each of which is defined and described in Item 4, which definitions and descriptions are incorporated herein by reference) are filed as exhibits hereto and are incorporated by reference in their entirety into this Item 6. 4 ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 is amended by adding Exhibits 99.18 and 99.19. Exhibit Description - ------- --------------------------------------------------------------- 99.18 Letter dated June 28, 2007 from Hidary Group Acquisitions, LLC to Everlast Worldwide Inc. 99.19 Press Release 5 After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule 13D is true, complete, and correct. Date: June 29, 2007 HIDARY GROUP ACQUISITIONS, LLC By: The Hidary Group, LLC its member By: /s/ Jack D. Hidary --------------------------------- Name: Jack D. Hidary Title: Managing Member After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule 13D is true, complete, and correct. Date: June 29, 2007 AQUAMARINE CAPITAL MANAGEMENT, LLC By: /s/ Guy Spier ---------------------------------------- Name: Guy Spier Title: Managing Member EXHIBIT INDEX Exhibit Description - ------- -------------------------------------------------------------- 99.18 Letter dated June 28, 2007 from Hidary Group Acquisitions, LLC to Everlast Worldwide Inc. 99.19 Press Release EX-99.18 2 e9824129v1.txt Hidary Group Acquisitions, LLC 10 West 33rd Street, 9th Floor New York, NY 10001 June 28, 2007 By Hand and Facsimile - --------------------- Board of Directors of Everlast Worldwide Inc c/o Seth Horowitz 1350 Broadway, Suite 3300 New York, NY 10018 Ladies and Gentlemen: We have received your purported notice of termination of the merger agreement between us and Everlast Worldwide Inc (the "Company") dated as of June 1, 2007 (the "Merger Agreement"), and a check for $3 million dollars representing the termination fee associated with such purported termination. You are in breach of the Merger Agreement and it is our firm view that the Company was not entitled to terminate the Merger Agreement because it had not received a Superior Proposal, as defined in the Merger Agreement, and that the purported termination is thus not effective. As such, we do not intend to cash the check until such time as we resolve our differences with the Company. We wish to emphasize that we were, and remain, prepared to negotiate all aspects of our proposal. In that regard, we are disappointed that the Company did not comply with its obligation under Section 7.03(d) of the Merger Agreement to negotiate with us "in good faith ... to make such adjustments in the terms and conditions of the [Merger] Agreement". We are also quite surprised that the Company's board of directors (the "Board") chose to act in a manner that was not designed to maximize value to the Company's shareholders. Your failure to negotiate with us in good faith after receiving our revised proposal for $30.55 per share (the "Revised Hidary Proposal"), and instead accept a lower $30.00 per share offer made by Brand Holdings Limited, coupled with a new, and presumably increased, termination fee payable to Brand Holdings, only resulted in depriving your shareholders of the additional value to which they are entitled. Notwithstanding the Company's wrongful termination of the Merger Agreement and failure to negotiate with us to obtain a better deal for your shareholders, we remain prepared to discuss, and, in fact, are now willing to offer an increase in the consideration to be paid to the Company's shareholders from the consideration contemplated by the Revised Hidary Proposal. At this time by this letter, we are submitting a new offer as follows (which offer will expire at 5:00 p.m. eastern on Monday, July 9th): o pay $31.25 per share o give all shareholders the right to elect to rollover up to 50% of their current equity interest in the Company. o if the termination fee agreed to by the Company in connection with the Brands Holding transaction is invalidated, we would be prepared to consider a further increase in our purchase price o all the other terms of the Revised Hidary Proposal remain in place as provided for in our letter to you yesterday. o we look forward to your prompt response to this offer. The rollover feature -- which will be purely voluntary for the Company's shareholders -- will present shareholders the opportunity to participate in the Company's future growth, while at the same time offering shareholders the right to cash out all or a portion of their shares at the very attractive price of $31.25 per share. The $30 per share proposal made by Brand Holdings to the Company (the "BH Proposal") is not a Superior Proposal (as such term is defined in the Merger Agreement) when compared to the Revised Hidary Proposal that we delivered to you yesterday. Given that the consideration contemplated by the Revised Hidary Proposal is higher than that contemplated by the BH Proposal (by an aggregate of more than $2.4 million), it is readily apparent that the BH Proposal is not "more favorable to the Company's stockholders (in their capacity as such) from a financial point of view". Moreover, as the Company is well aware, the Revised Hidary Proposal is more than "reasonably capable of being consummated". The definition of Superior Proposal in the Merger Agreement requires the Board to determine, in the first instance, whether the Acquisition Proposal is more favorable to the shareholders from a financial point of view. This determination does not include consideration of which proposal is more likely to close. On this point, it is inconceivable that the BH Proposal satisfies this test. Under the definition of Superior Proposal, the Board does not get to consider the likelihood that the proposal will be able to close, unless it answers the first question in favor of such Acquisition Proposal. Where, as here, the Revised Hidary Proposal is more favorable to the shareholders from a financial point of view, the question never arises. Moreover, even if it were relevant to this analysis, the Revised Hidary Proposal is as or more likely to be consummated than the BH Proposal. The financing package for the Revised Hidary Proposal is superior to the one the Board approved earlier this month in connection with our original proposal. In assessing the likelihood that Wells Fargo (Hidary's lead lender) will fulfill its $65 million financing commitment, it is appropriate for the Company to take into account the fact that Wells Fargo has a 15-year 2 history as senior lender to the Company, and is thus intimately familiar with the Company. Moreover, Wells Fargo's recent increase in the level of its commitment from $60 million to $65 million confirms Wells Fargo's high level of confidence in the Revised Hidary Proposal. In addition, Wells Fargo's amended commitment has not modified any of the other terms contained in the commitment letter that was previously reviewed by, and found acceptable to, the Board. Additionally, in considering our ability to close, bear in mind that the equity commitments already provided to you are sufficient, with little, if any, debt financing at all, to finance the entire merger consideration. Accordingly, any concerns about the debt financing (which would be unfounded in any event) are irrelevant. The Company should also recall that in connection with the execution of the Merger Agreement on June 1, the Company expressed concern about an apparent due diligence out with the proposed Wells Fargo financing documents. In response, we immediately secured modifications to the financing commitments that were requested by, and found satisfactory to, the Company. If the Company had concerns about our current financing arrangements (which, as noted above, are superior to the ones approved by the Company on June 1) you should have informed us and we would have acted promptly to address such concerns. Indeed, our immediate responsiveness to the financing concerns expressed by the Company on June 1 should have made clear to you that we were and are prepared to respond to any reasonable concerns (regarding financing or otherwise) expressed about our proposal. As noted above, the amount of committed equity financing (which, inclusive of the Burlingame and Aquamarine rollover commitments discussed below is equal to approximately $133 million in the aggregate) is sufficient to fund the entire transaction with little, if any, debt -- even in the virtually unimaginable scenario in which our lenders walk away from the deal and no other shareholders determine to rollover any portion of their equity. Other than those equity investors that are substantial funds with assets in the billion dollar range and higher, at the time we signed the Merger Agreement, we provided you with back up information regarding the financial capability of our other investors. These investors are thoroughly familiar with the due diligence relating to the Company and their level of enthusiasm and commitment to the transaction is very high. The rollover commitments of approximately 7.3% of outstanding shares from Burlingame and 3.1% of outstanding shares from Aquamarine are clear and unequivocal and are equivalent to firm and unqualified commitments for purposes of assessing the likelihood of Hidary's capacity to close. 3 We were quite surprised to learn that the Board entered into a merger agreement with respect to the BH Proposal based on the foregoing facts and circumstances. We will be exploring all options, including legal and equitable remedies, available to us in connection with the Company's purported termination of the Merger Agreement. Sincerely, Hidary Group Acquisitions, LLC By: The Hidary Group LLC, its managing member By: /s/ Jack D. Hidary ------------------ Name: Jack D. Hidary Title: Managing Member 4 EX-99.19 3 e9824162v1.txt PRESS RELEASE CONTACT: Dan Brady Rubenstein Communications Phone: 212-843-8292 Email: dbrady@rubenstein.com --------------------- THE HIDARY GROUP ANNOUNCES REVISED OFFER FOR EVERLAST WORLDWIDE INC. NEW YORK, NY - JUNE 29, 2007 - The Hidary Group, a New York-based investor group, announced today that it has revised its offer to acquire Everlast Worldwide Inc. (Nasdaq: EVST). The increased offer is for $31.25 per share in cash. The new offer is outlined in a letter from The Hidary Group to the Everlast board of directors. The Hidary Group also announced that shareholders have the option of rolling up to 50 percent of their shares into the deal to become investors in the new entity. The company has secured commitments to this option from Burlingame, Everlast's largest indpendent shareholder, as well as another major shareholder. Everlast shareholders holding approximately 17.7 percent of Everlast's outstanding stock have already agreed to participate in this plan. This rollover feature -- which will be purely voluntary for the Company's shareholders -- will present shareholders the opportunity to participate in the Company's future growth, while at the same time offering shareholders the right to cash out all or a portion of their shares at $31.25 per share. Furthermore. if the termination fee agreed to by the Company in connection with the Brands Holding transaction is invalidated, The Hidary Group would be prepared to consider a further increase in its purchase price. "Our superior and unique offer provides the greatest value to shareholders, and we remain committed to enhancing Everlast's iconic global brand as part of our group of companies," said Jack D. Hidary, Managing Partner of The Hidary Group. "Our strong relationship with Everlast and long history in the sports and athletic apparel marketplace make The Hidary Group an ideal fit for Everlast Worldwide, its management and its employees." The Hidary Group is the lead sponsor of the deal along with other funds each of which manages in excess of $1 billion. Clarence Schwab, Managing Partner of C. Schwab LLC, an investment firm, is serving as financial advisor to the Hidary Group. Proskauer Rose LLP acted as legal advisors to The Hidary Group. About The Hidary Group The Hidary Group is a New York-based investor group. The firm's portfolio consists of companies in various industries, including consumer goods, real estate, technology and financial services. # # # -----END PRIVACY-ENHANCED MESSAGE-----