LL Flooring (NYSE:LL) stock is climbing 20% this morning. This comes on news that its founder has offered to buy all of the company’s remaining outstanding shares for $5.76 each. The firm’s founder, Tom Sullivan, is trying to buy the retailer and combine it with another company he founded, Cabinets to Go. LL stock closed yesterday at $4.14. At the time of writing, the shares are changing hands for more than $5.
Formerly known as Lumber Liquidators, LL Flooring announced yesterday that it had received the “unsolicited, non-binding offer” from Cabinets to Go. Like LL, Cabinets to Go is a retailer focused on the home-improvement sector.
LL stated that its board intends to study the offer and subsequently determine what steps to take. The board added that its decision would be based on “the best interests of the Company and all of its shareholders.”
The company also stated that it believes that its “long-term fundamentals … are strong,” while it is “well positioned to take advantage of the medium- to long-term tailwinds for repair and remodel spending.” The retailer added that it views itself as having unique positioning in the space.
Background on LL Stock
Founded more than 25 years ago, the retailer has over 400 stores in the U.S. In 2015, the popular TV news show 60 Minutes accused the company “of selling Chinese-made laminate flooring” with “potentially carcinogenic formaldehyde.” Then, in 2019, LL agreed to pay $33 million to settle federal charges of misleading investors about the quality of the flooring that it was selling.
In 2022, the company’s revenue came in at $1.1 billion, while it reported an operating loss of $11.7 million. In 2021, LL Flooring generated revenue of $1.15 billion and operating income of $60 million.
Investors who own LL stock or are interested in buying it should try to determine whether the company will accept Sullivan’s offer. Furthermore, they should consider if Sullivan will decide to raise the offer.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
