Clinton Group Plans to Take The Wet Seal, Inc. (WTSL) Private; Picks Up the Stake

Greg Taxin‘s Clinton Group, has disclosed, in a newly amended filing that it is looking into financing alternatives, which will allow the fund to make an offer to acquire the equity of  The Wet Seal, Inc. (NASDAQ:WTSL), and take the company private.

Aside from that, Clinton also revealed slightly increasing its exposure to The Wet Seal, Inc. (NASDAQ:WTSL), currently owning around 6.9 million class A shares, versus 6.5 million, including options, held at the end of September. The new position also includes options to purchase 123,200 shares. The stake is activist by nature and amasses 8.1% of the company’s class A outstanding stock.

The Wet Seal, Inc. (NASDAQ:WTSL) is a small cap operator of retail stores selling apparel and accessories. For the third quarter, the company posted a decline in sales to $127.7 million, from $135.5 million a year ago. It also had a net loss of $14.9 million, equal to $0.18 per share, almost flat over the year. The stock of the company dropped by over 4.7% year-to-date.

Clinton Group is one of the largest shareholders of The Wet Seal, Inc. (NASDAQ:WTSL). Another one is Kendall Square Capital, managed by Jason F. Harris, which revealed, in its latest 13F, holding 1.7 million shares, worth $6.6 million. Some of the other “hedgies” hold less significant positions.

Clinton Group came on our radars a couple of months back, also because of its activist moves regarding ValueVision Media Inc (NASDAQ:VVTV). The fund formed an activist group with Carlo Cannell and his hedge fund Cannell Capital, and try to pursue some changes at the company, including changes applied to the company’s board.

The Wet Seal, Inc. (NASDAQ:WTSL) is the second-largest stake in Clinton’s equity portfolio, being outrun by Everyware Global, Inc. (NASDAQ:EVRY), in which the fund disclosed holding over 3.2 million shares, worth $36.9 million.

Disclosure: none

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