Lion Capital, the hedge fund that formerly backed American Apparel Inc (NYSE: APP) continues to urge the company to consider its strategic alternatives, including a sale of itself, according to The Wall Street Journal.
WSJ stated that the company received a letter from Lion Capital, a key investor in American Apparel from 2009 to 2013, requesting the company form a special committee to review its options.
American Apparel's Board of Directors confirmed last week it received a takeover proposal, valuing the company at $1.40 per share. However, the Board said that it remains committed to turning the company around and views the bid as significantly low.
The fund also stated it will name its founding partner Lyndon Lea to American Apparel's Board of Directors, instead of Gene Montesano, an executive behind the Lucky Brand Jeans brand. Lion Capital maintains the right to appoint Board members under a previous financing agreement with the company.
WSJ noted that no other bidders have emerged at this time and that the company's former Chief Executive Officer Dov Charney is working with a private equity firm Irving Place Capital on a deal to acquire the company and restore the executive in some capacity.
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