Kellwood drops its takeover defenses

Shares of Kellwood (NYSE: KWD) are up more than 15% today after the company's board of directors decided that it would let the people who own the company decide [subscription required] whether they want to sell it. What a novel idea!

According to a press release put out by the company, Kellwood "intends to remove all impediments to the $21.00 per share cash tender offer made by an affiliate of Sun Capital Securities Group so that it can be consummated on February 12, 2008 if a majority of the shares are tendered. Sun Capital's $21.00 per share cash tender offer, under its terms, is not subject to financing or due diligence."

Kellwood has also hired Banc of America and Morgan Stanley to search for buyers who might able to top Sun Capital's offer. If they find a buyer that can make a better offer, they said they will reserve the right not to rescind the debt tender offer, a poison pill designed to make it more difficult for a third party to gain control of the company without the consent of the board of directors.

It's good to see that Kellwood is doing the right thing -- the fate of the company should rest in the hands of the shareholders, not the management and directors who have a history of failing to generate shareholder value.

Kellwood is an apparel company with brands including Baby Phat, Phat Farm, Vince, and Hollywould.