Scorned CEO Striking Back?

Ezra Dabah, the former CEO and still major shareholder of The Children's Place PLCE (NASDAQ) (approximately 17%), appears to be ready to make good on previous statements he planned to make a bid for the company. According to Crain's New York Business Dabah who was forced out as the company's CEO back in September 2007 (see earlier blog) recently sent a letter to the SEC,

revealing his intentions to offer, along with Golden Gate Private Equity Inc., $24 per share in cash for Children's Place.The letter seeks the board's permission to bypass certain Delaware shareholder acquisition laws that could otherwise preclude Golden Gate's participation in an offer.

The offer would be a 35% premium over Wednesday's closing price of $17.78. As of Dec. 13, Mr. Dabah owned about 5 million shares, or 17.2% of total shares outstanding. The total value of the potential offer is based on 24.1 million outstanding shares Mr. Dabah doesn't already own.

This is all happening at the same time that the company released a surprising same store sales report for January which saw a 6% increase over same month in 2007. The increase was especially surprising, considering the troubled retail market and the turmoil the company has been undergoing for the last number of months. To complicate matters, The Children's Place also recently received a Nasdaq delisting notice regarding its failure to hold its annual stockholder meeting by Feb. 3. The Company noted its request for an extension and noted the delay in filing their annual report as the reason for the delinquent meeting.

It's hard to sort through it all. Is the scorned CEO looking to get his revenge or is this just a smart move? Keep a close eye on the firm.