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Cherokee Backs Out of Mossimo Bid for $33 Mil.

It looks like Iconix Brand Group will prevail in its acquisition bid for sportswear manufacturer Mossimo after reaching an agreement with Mossimo’s other suitor, Van Nuys-based Cherokee Inc. Cherokee Inc. today said it would rescind its offer to acquire sportswear manufacturer Mossimo for $8.50 a share in cash and stock in exchange for a $33 million cash payment from Iconix. Iconix, which had earlier offered to acquire Mossimo for cash and stocks totaling about $7.50 per share, agreed to the payment to terminate a finder’s fee agreement under which Cherokee receives 15 percent of royalties received on sales of its brand at Target in perpetuity. In exchange for the payment, which Cherokee would receive upon the close of Iconix’s purchase of Mossimo, Cherokee said it would terminate its acquisition offer. The Iconix transaction is expected to close in the third quarter of 2006.

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