Trans World Entertainment Update: Is Sherwood serious?

Not too long ago I wondered about Sherwood Investments' $7 per share bid for Trans World Entertainment (NASDAQ: TWMC). I questioned whether Sherwood was serious about its offer, but added that Julian Benscher, the man who signed the company's press releases, told me by phone that the offer was serious.

After that post was published, Benscher called me back and explained that the reason he had not acquired 5% of the company and filed a 13-D yet was that Sherwood's securities lawyer is currently traveling.

In addition, he said that his reason for stating in the press release announcing the offer that Sherwood would possibly raise its offer was that in a prior PR on TWMC, he has said he believed the company's value was higher: "We are highly confident that an auction of the company would result in a sale in excess of $8 per share, a considerable premium to your current proposal."

I'll believe that Sherwood's $7 per share offer is serious when a deal is consummated. Goldman Sachs Group, Inc. (NYSE: GS) has been shopping the company for months, it's hard to imagine another bidder emerging with a higher offer.

But until then, I think investors should take Sherwood's offer with a bucket of salt.