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25 per share in cash. The company noted that Eddie B Holding, owned by affiliates of Sun Capital Partners, Inc. and Golden Gate Capital, would buy Eddie Bauer in a deal worth about $614 million, including debt to be repaid of about $328 million, as of September 30, 2006.

Redmond, Washington-based Eddie Bauer said its Board of Directors has unanimously approved the merger deal and recommends that its stockholders vote to approve the sale. The acquisition is anticipated to close in the first quarter of 2007, subjecting to the approval of Eddie Bauer stockholders and other customary closing conditions, including Hart-Scott-Rodino antitrust review. Further, the company said that the deal is not subject to a financing condition.

According to Eddie Bauer, the per share deal price represents an approximate 12% premium to the prior four weeks' average closing price of Eddie Bauer's common stock. Eddie Bauer noted that the sale is the culmination of an exploration of strategic alternatives initiated by the company in May 2006. Eddie Bauer is a specialty retailer that sells casual sportswear and accessories for the modern outdoor lifestyle.

The company's products are available at about 380 stores throughout the United States and Canada, through catalog sales and online. The company also participates in joint venture partnerships in Japan and Germany and has licensing agreements across a variety of product categories. Affiliates of Sun Capital Partners, Inc.

and Golden Gate Capital are active investors in the retail and consumer products industries. Private investment firm Sun Capital Partners is focused on leveraged buyouts, equity, debt, and other investments in market-leading companies. Meanwhile, Golden Gate Capital, a private equity firm with over $2.

6 billion of capital under management, is dedicated to investing in change-intensive opportunities. Commenting on the deal, Fabian Mansson, Chief Executive Officer of Eddie Bauer, said, "Following a comprehensive review process, our Board of Directors has unanimously determined that the transaction announced today is in the best interests of our Company and its stockholders. We believe that the transaction will provide Eddie Bauer with new resources and the time necessary to execute our turnaround strategy.

We look forward to partnering with Sun Capital and Golden Gate, who bring extensive experience in the retail and catalog sectors, to take our Company to the next level and to capitalize on the potential of the Eddie Bauer brand." The company said it anticipates filing its preliminary proxy statement with respect to the transaction within ten days. A Form 8-K with a copy of the merger agreement would be filed with the Securities and Exchange Commission later Monday, Eddie Bauer said.

Goldman Sachs Co. served as Eddie Bauer's financial advisor in connection with the deal. The company noted that Goldman Sachs Co.

and William Blair Co. each rendered separate fairness opinions to its Board as to the fairness, from a financial point of view, of the consideration to be received by Eddie Bauer's stockholders in the merger. Eddie Bauer, which debuted its trading in NASDAQ Global Market on October 12, 2006, is slated to post its third quarter financial results on Tuesday, November 14.

EBHI closed Friday's regular trading session at $8.85, down $0.63, on a volume of about 21 thousand shares.

For the past 52-weeks, shares traded in the wide range of $6.00-$23.50.