CINCINNATI -- U.S. Shoe Corp. yesterday agreed to be bought by Luxottica Group SpA after the Italian company increased its offer to $1.3 billion, or $28 a share, in cash.
The agreement ends two years of upheaval at Cincinnati-based U.S. Shoe, whose lagging share prices led to corporate restructurings, demands from shareholders to split apart the retailer and Luxottica's unsolicited overtures.
The addition of U.S. Shoe's LensCrafter unit will make Luxottica, the largest retailer and maker of eyeglass frames, with combined eyewear revenue of more than $2 billion.
The optical unit, which has more than 500 stores, has been U.S. Shoe's best-performing division. Its operating earnings last year rose to $71.9 million from $43.6 million. It had revenue of $767 million and same-store sales gains of 13 percent.
The Milan-based maker of eyeglasses is expected to honor U.S. Shoe's sale of its footwear division to Nine West Group Inc. for about $600 million.
"This should have happened a long time ago," said Eric Longmire, managing director of the investment firm Wyser-Pratte Co., a U.S. Shoe shareholder that started a proxy fight for a board seat in February. "They got the best buyer for their footwear division and the best buyer for eye care."
Luxottica had first offered $24 a share, or $1.11 billion, in a hostile offer on March 3. U.S. Shoe rejected that bid as inadequate.
Shares in U.S. Shoe closed up $1 at $27.50 on trading of 2.2 million shares, about four times its average daily volume over the past three months. The stock, which traded at a 52-week low of $15.25 in December, is at its highest level since late 1988.