DSW and Retail Ventures Sign Merger Agreement

by Nate Hunter

Columbus, OHFootwear specialty retailer DSW, Inc. and its largest shareholder, Retail Ventures, Inc., have agreed to an all-stock merger that will make RVI a wholly-owned subsidiary of DSW. 

Columbus, OH—DSW Inc., a leading branded footwear specialty retailer, and its largest shareholder, Retail Ventures, Inc., have entered into an all-stock merger agreement providing for RVI to become a wholly-owned subsidiary of DSW in a tax-free exchange of shares at an exchange ratio of 0.435 DSW shares per each RVI share.

The transaction is expected to generate significant value for DSW, RVI and their respective shareholders.

Goldman, Sachs & Co. served as financial advisor for the special committee of the board of directors of DSW and Katten Muchin Rosenman LLP acted as independent counsel. Houlihan Lokey served as financial advisor for the special committee of the board of directors of RVI and Baker & Hostetler acted as independent counsel.

The transaction is subject to, among other conditions, approval of a majority of the outstanding shares of DSW held by disinterested DSW shareholders (excluding Schottenstein Stores Corporation and its affiliates, and affiliates of RVI), approval of a majority of the outstanding shares of RVI, and other customary conditions and approvals.

DSW’s net sales for the year ended January 29, 2011 increased to $1.82 billion compared with $1.60 billion for the year ended January 30, 2010. Same store sales increased 13.2% for the comparable period versus an increase of 3.2% last year.  

DSW now estimates annual diluted earnings per share of approximately $2.38 to $2.42 for fiscal 2010. As of February 8, 2011, DSW operated 311 stores in 39 states and online at www.dsw.com. DSW also supplied footwear to 352 leased locations in the United States.  For store locations and additional information about DSW, visit www.dswinc.com.

Retail Ventures, Inc. is a holding company whose only operating subsidiary is DSW.


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