KANSAS CITY, Mo. (AP) — Stride Rite Corp. surged more than 30 percent a day after rival Payless ShoeSource Inc. said it struck a deal to acquire the shoe store chain for about $800 million.
Payless, which said Tuesday it expects the deal would close in the third quarter, expects to change its corporate name to Collective Branding Inc.
The holding company will operate the Payless and Stride Rite chains under their own names, as well as Collective Licensing International, a brand development and licensing company.
Payless, based in Topeka, Kan., announced in March that it was buying Denver-based Collective International LP for $91 million.
Shareholders of Stride Rite, which operates 300 stores and licenses or owns such brands as Keds, Saucony and Tommy Hilfiger Footwear, would receive $20.50 per share, a 32.6 percent premium over the $15.45 price at which shares closed in trading Tuesday. Payless, which said Collective Branding would also assume Stride Rite debt, made the announcement after markets closed Tuesday.
Stride Rite shares rose $4.76 Wednesday, or 31 percent, to $20.21, topping a 52-week high of $18. Payless, which jumped $3.24, or 10.1 percent, to $35.14, has traded at a 52-week range of $20.81 to $35.36.