Middleton plans to go private

By Staff -- Playthings, 9/30/2008 9:02:00 AM

WAUKESHA, Wis.—The Middleton Doll Co. intends to deregister its common stock, the doll and home décor manufacturer said today, in a cost-cutting move.

The move is expected to result in a direct cost savings to the company in the near term from the elimination of SEC reporting requirements. Additionally, the plan will allow the company to avoid the “substantial” additional costs associated with the compliance and auditing requirements of the Sarbanes-Oxley Act of 2002, Section 404, according to the company.

The transaction would be accomplished through a 1,000-to-1 reverse stock split of shares of the company’s common stock. Shareholders with less than one share after the reverse-split will have their partial shares cashed out at a price of $0.50 in cash per share on a pre-split basis. Shareholders with one or more shares after the reverse-split will continue as shareholders of the company, with any fractional share being rounded up to the next whole number of shares.

If, after completion of the transaction, the company has fewer than 300 shareholders of record, the company intends to terminate the registration of its common stock (and its preferred stock, of which there are already fewer than 300 shareholders of record) under the Securities and Exchange Act of 1934, and become a non-reporting company.

The proposed transaction is subject to approval by the company’s shareholders, a special meeting for whom will be held by early December.

Middleton currently operates in two segments, consumer products and financial services. The company’s consumer products segment includes Lee Middleton Original Dolls Inc., a designer and marketer of collectible and play dolls, and License Products, Inc., which does business as FirsTime Manufactory, a designer and marketer of clocks and home décor products that are sold to major national retailers. The company’s financial services segment is comprised primarily of the remaining assets of the lending and real estate leasing business of its former subsidiary, Bando McGlocklin Small Business Lending Corp. The company does not intend to continue in the financial services segment after the remaining financial services segment’s assets are sold.

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