Trans World Investor Makes Competing Bid

A shareholder of Trans World Entertainment Corp., which has said it opposes a nonbinding offer by the company's chief executive, made a competing bid for the music and video retailer on Thursday.

The shareholder, Sherwood Investments Overseas Ltd., offered $217 million, or $7 per share, for the company. It already owns 1.5 million Trans World shares, representing about 5 percent of the shares outstanding.

The offer competes with a nonbinding $5 per share buyout proposal by Trans World CEO Robert J. Higgins _ who currently holds about 40 percent of the company's outstanding stock _ and 11.9 percent shareholder Riley Investment Management LLC. The offer was first announced on Nov. 9.

In afternoon trading, Trans World shares spiked 79 cents, or 15.9 percent, to $5.76. During the past 52 weeks, the stock fell from a high of $6.98 last November to a low of $3.62 earlier this month, before jumping on news of the first acquisition offer.

In a letter to Higgins released on Nov. 16, Sherwood said the $5-per-share offer is "grossly inadequate" and called for competing bids.

In a second letter to Higgins and Trans World's board on Thursday, Sherwood said it may increase the $7-per-share offer as the company goes through the due diligence process. The investor said it is currently seeking nonpublic information from the company but has not yet signed a confidentiality agreement.

Sherwood said its offer is subject to the availability of financing and the completion of a purchase agreement.

Sherwood also asked Trans World's board for permission to discuss its proposal with other shareholders.