What are the potential risks and benefits for shareholders not part of the Rolling Stockholders in this transaction?

Potential Benefits for Non‑Rolling Shareholders

• Immediate cash premium – The deal offers a fixed cash price of $16.75 per share, which is generally above Guess?’s recent trading levels (mid‑$14s‑$15s) and represents a modest premium to the market. For shareholders who would otherwise be left with a “post‑sale” residual stake, the cash tender provides a clean, liquid exit at a known valuation.
• Liquidity and certainty – Because the consideration is cash, investors avoid the execution‑risk and valuation uncertainty that can accompany a stock‑for‑stock exchange. The transaction also removes exposure to any future integration or brand‑performance risk that could depress Guess?’s earnings once the business is absorbed by Authentic Brands.
• Simplified exposure – By cashing out, investors can redeploy the proceeds into higher‑growth opportunities or defensive positions, especially if they view the fashion‑retail sector as over‑valued or cyclically vulnerable.

Potential Risks for Non‑Rolling Shareholders

• Valuation ceiling – The $16.75 cash offer caps upside. If Guess? were to break out on strong top‑line growth, a successful brand‑revitalisation, or a more favorable acquisition bid, shareholders who cash out now will miss any future price appreciation beyond the tender price.
• Regulatory and pricing scrutiny – The involvement of former Louisiana Attorney General Charles Foti and Kahn Swick & Foti in probing the “adequacy of price and process” adds a layer of uncertainty. A negative finding could force a renegotiation, delay the closing, or even lead to a lower cash tender, exposing shareholders to price‑fluctuation risk in the interim.
• Residual exposure – After the transaction, Guess? will continue as a publicly‑traded shell with a reduced asset base. The remaining shares may trade at a discount to pre‑sale levels, reflecting the loss of the core business and potential liquidity‑drain on the stock. Investors who do not tender may face a de‑levered, lower‑margin company with limited growth prospects.

Trading Implications

• If the current market price is below $16.75, tendering the shares (or selling on the open market) is attractive—capture the premium and avoid the regulatory‑delay risk.
• If the price is already at or above $16.75, weigh the upside potential of staying invested against the certainty of cash. Consider a partial tender: lock in the premium on a portion of the position while retaining exposure to any upside catalysts.
• Monitor the investigation’s progress. Any material adverse finding could depress the tender price or create a “hold‑on” scenario, making a quick exit before the announcement prudent. Conversely, a clean‑bill of‑health outcome may clear the way for the deal to close at the announced cash price, reinforcing the tender’s value.