Lululemon Athletica Inc.’s (LULU) Dennis Wilson Exploring Buyout Options With PE Firms

Charles Payne from Fox Business discussed with anchor Nicole Petallides about the recent rise in the stock price of Lululemon Athletica Inc. (NASDAQ:LULU).

“The advisors, founder Dennis Wilson’s advisors have been talking to private equity firms, so we will see what happens, including Leonard Green & Partners, to find out if they are actually interested in purchasing,” Petallides said.

Petallides was referring to the recent news about Dennis Wilson’s advisors being in talks with private equity investors which included PE firm Leonard Green & Partners to explore the possibility of a buyout.

As reported by The Wall Street Journal (WSJ), industry experts believe that such a buyout would not be easy considering the fact that investors would demand a premium over the existing market capitalization of $6 billion.

Moreover, the plans for a buyout reflect the founder Dennis Wilson’s decision to bring in changes in the management of the Lululemon Athletica Inc. (NASDAQ:LULU). This is also evident in the fact that on June, 2014 at the company’s annual general meeting, Wilson had voted against the company’s new chairman as well as another director and expressed his unhappiness with the strategic direction that the management was giving to the company.

Wilson was also recently reported to be in talks with Goldman Sachs on ways to increase his ownership in the company, where he currently has a 28% stake.

Wilson having resigned as chief executive in 2005, remained as chairman of the company till May, 2014 and had to step down from the chairman post due to his controversial remarks on the company’s women customers i.e. he had said that some women don’t have a body that is suitable for the yoga pants that Lululemon Athletica Inc. (NASDAQ:LULU) makes and hence he said that these customers are facing faults with the pants.”

Currently, Wilson remains a director on the board of Lululemon Athletica Inc. (NASDAQ:LULU). Moreover, it had cost millions of dollars for the company to recall its yoga pants which were found to be too sheer.

Disclosure: none