Payless ShoeSource, Inc. (NYSE: PSS) ( and The Stride Rite Corporation (NYSE: SRR) ( announced today Payless’ imminent acquisition of Stride Rite for approximately $800 million plus the assumption of Stride Rite debt. The all-cash offer of $20.50 per share represents a 32% premium over Stride Rite’s average stock price over the past 90 days and was approved unanimously by the boards of directors of both companies.

The epic Strde Rite corporation currently owns or licenses brands Stride Rite, Keds, Sperry Top-Sider, Tommy Hilfiger Footwear, Saucony and Robeez. Under the new deal, Payless ShoeSource will rename the company Collective Brands, Inc. and, as a holding company, will operate three standalone business units and aims to accelerate retail, wholsale and licensing growth, expanding consumer reach across multiple price points and channels.

Once the transaction is completed, Matt Rubel, Payless’ Chief Executive Officer and President, will serve as CEO of Collective Brands, Inc. Collective Brands, Inc. will remain listed on The New York Stock Exchange and, along with Payless ShoeSource, have its headquarters in Topeka, Kan.; Stride Rite’s headquarters will remain in Lexington, Mass.; and Collective Licensing will continue to be headquartered in Denver, Colo. Each of the individual operating units will retain their own names, identities and discrete operations.

“This transaction is squarely on strategy and driven by its strong growth potential,” said Mr. Rubel. “Through this acquisition and as indicated by the change in our name, we are creating a leading, innovative global footwear, accessory and lifestyle brand company that is well positioned to grow in both our key domestic and international markets. Together we can provide the customers, employees and business partners of all three business units with greater opportunities, and investors with enhanced value.”