Helen of Troy jumps after Spectrum Brands makes takeover offer (update)

Update 2:10 pm: Adds Helen of Troy comment, updates shares.

Helen of Troy HELE soared 24% after a Spectrum Brands SPB unit made a $37-a-share offer for the company. Spectrum Brands rose 6.8%.

Spectrum's Empower Brands, which is co-owned by Oaktree Capital Management, is making its second bid for Helen of Troy HELE after originally offering $34 a share on Aug. 19, according to a statement on Wednesday. Empower raised its offer to $37 on Oct. 12. An affiliate of Empower Brands currently owns approximately 4.5% of Spectrum's outstanding shares.

Helen of Troy HELE confirmed that it received the unsolicited, non-binding proposal from Spectrum Brands SPB.

"The Helen of Troy Board, after comprehensive review alongside its financial and legal advisors, has unanimously determined that Empower Brands’ proposal substantially undervalues Helen of Troy and its prospects for continued growth and value creation, and is not in the best interest of Helen of Troy or its shareholders," the company said in a statement on Wednesday.

The latest offer, which has an enterprise value of $1.6 billion, represents a 28% premium to Helen of Troy's HELE closing stock price on Oct. 30.

"As Helen of Troy is currently comprised, it does not have the scale or the financial ability to acquire or achieve the scale to compete in a landscape that we know well," Spectrum Brands CEO David Maura said in the statement. "This transaction maximizes value for the company's shareholders and provides certainty of closing.”

Spectrum Brands SPB said it's confident it can complete due diligence and finalize a merger agreement on an accelerated timeframe of about 45 days.

Bloomberg News earlier reported on the takeover offer.

“Rather than substantively engaging with us about a transaction, Helen of Troy has attempted to halt any process by requiring us to enter into an overly restrictive agreement that would limit our ability to communicate our offer to the Helen of Troy shareholders," Maura said in the statement.

Shares of Helen of Troy HELE have risen ~40% this year, while Spectrum Brands SPB have advanced 56%.

Spectrum Brands SPB is set to report Q3 results next Thursday.

BofA is acting as a financial advisor, and Baker McKenzie LLP is acting as a legal advisor to Spectrum Brands.