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Trans World CEO a Step Closer to Buy

10 Dec, 2007 By: Erik Gruenwedel

CEO Robert Higgins' desire to acquire all outstanding shares of common stock and take Trans World Entertainment private took another step with the formation of an LLC.

Higgins and investor Bryant Riley last month formed a nonbinding limited liability company (LLC) backed by 12 million shares of Trans World common stock from Higgins and a minimum 3.5 million shares from Riley, according to a regulatory filing.Riley, who is based in Santa Monica, Calif., would not contribute more than 5.5 million shares of common stock.

Dubbed by Higgins as “the last standing entertainment retail chain,” Albany, N.Y.-based Trans World operates more than 950 stores, primarily under the F.Y.E. (For Your Entertainment), Suncoast and Second Spin brands.

Higgins, who founded Trans World in 1972, Nov. 9 submitted a nonbinding bid to the board that involved purchasing about 31 million outstanding shares for $150 million in cash.

Trans World has established a special committee to review the bid, which already one investor has called “grossly inadequate.”

Analysts say returning to privately held status would eliminate accounting, administrative and legal costs associated with being public.

According to the filing, Riley can opt out of the deal at any time, and Higgins can pursue acquisition plans separately.

The company lost $14.3 million in the third quarter (ended Nov. 3).

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