The pioneering online jeweler, set to be sold to private investors, went through a couple of rounds of exploratory discussions with a range of firms including a Chinese department store.
Online jeweler Blue Nile talked with about a dozen potential suitors, including a Chinese department store, before agreeing earlier this month to be sold to investment firms Bow Street and Bain Capital.
The Chinese department store had talked with Blue Nile about possibly acquiring the online jeweler since late 2014, according to a proxy statement Blue Nile filed Tuesday with the Securities and Exchange Commission.
Separately, a large jeweler based in China had discussed acquiring a minority interest in the Seattle-based company and working together to expand in China.
The suitors for various potential transactions, who weren’t identified, also included a private diamond and jewelry company, a large department-store chain and financial firms.
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Starting in August 2015, Blue Nile’s representatives also contacted 13 prospective buyers, “including strategic buyers in the e-commerce, retail distribution and jewelry specialty market, as well as one financial sponsor,” to gauge interest in acquiring the company, according to the filing.
But by last December, the third-party interest had sputtered out, with potential buyers “citing, among other reasons, the difficulty in justifying a premium to Blue Nile’s then current stock price” in the high 30s, the document says.
The eventual buyer, Bow Street, was introduced to Blue Nile CEO Harvey Kanter by a major supplier and business partner to the online jeweler last June.
Bow Street initially proposed buying Blue Nile for $35 per share. It also contacted potential financial sponsors, including Bain Capital, to help finance any acquisition.
Eventually Blue Nile’s board negotiated a price of $40.75 per share — about $500 million — representing about a 34 percent premium over Blue Nile’s closing price Nov. 4.
Shareholders must still approve the acquisition, which Blue Nile’s board is recommending they do.
The filing says Kanter would receive a “golden parachute compensation” package of about $8.4 million, should he be involuntarily terminated after the acquisition.
Blue Nile went public in 2004, and its stock peaked at close to $100 in 2007. For the past year, its shares have fluctuated between $22 and $39. It closed Tuesday at $40.43.
It has struggled with flat sales and crimped profits in recent quarters as jewelry prices declined.
In the latest quarter, its net income fell to $1.29 million from $1.98 million a year earlier, while sales decreased to $105.1 million from $109.9 million.