For Martha Stewart, the $353 million sale of her empire to Sequential Brands is a good thing, not a great one.
The deal still represents nearly a $167 million payday for the domestic diva who started as a bestselling author and built that into an entire company that at is peak was worth more than $2 billion.
Today, the home-entertainment queen controls 27.1 million shares of Martha Stewart Living Omnimedia, which will have a value of $166.7 million at $6.15 a share. Stewart controls an estimated 46 percent of the common stock.
The leaves just $187 million for the rest of the shareholders.
Michael Kupinski, an analyst who follows MSO, said he felt the $6.15 a share offer from Sequential was “too low” and said he hopes for a sweetener to the deal.
Stewart controls nearly 90 percent of the super voting shares, but her votes will not be counted when the deal goes to shareholders per the agreement.
It must be approved by a majority of the non-Martha shareholders. There is also a 30-day “Go Shop” agreement built into the pending deal in case a new suitor materializes — but since the company has quietly been in play for over a year, a last-minute deal seems unlikely.
The stock closed last Friday at $6.98 a share on speculation over the pending deal.
But when the deal was announced Monday morning at only $6.15 a share — half in cash, half in stock — the MSO stock tumbled 12.3 percent to close the day at $6.12 a share. Sequential was also down 1.1 percent to close at $16.82 a share.
In the past, Stewart had appeared on two of Forbes’ billionaire lists, but in May 2015, when it was tallying up her current worth, it pegged it at only $220 million — not enough to make the top 50 list of richest women.
“While Stewart didn’t meet the $250 million required for the top 50, the proceeds of the sale could position her for a spot on the list next year,” a Forbes spokeswoman said.
Helping Stewart to crack the list again will be some stock options that she’ll be able to exercise when the deal closes.
She has a series of stock options with different strike prices ranging from 850,000 options granted in 2009 with a $1.96 price, to a 2011 grant of 99,000 options with a strike price of $3.95 and 225,000 options granted in 2010 with a strike price of $5.48 a share, totaling $5,044,161 once the stock’s costs per share are subtracted.
The company has not filed a proxy for the fiscal year that ended in 2014, so nothing beyond the 2013 options period is on file. As the company’ s chief creative officer, Stewart most certainly would have had additional options.
While the run up in stock price is not as robust as it was during its heyday when it reached $47.50 a share on the first day of its IPO in 1999, it has still enjoyed a relatively strong run over the past 18 months.
When Daniel Dienst, the scrap metal executive who replaced Charles Koppelman as CEO took control in November 2013, the stock was wallowing around $2.10 a share.
