Women’s apparel retailer Chico’s FAS Inc said on Friday it had received an unsolicited offer from Sycamore Partners LP to take the company private in a deal valued at $407.8 million.
Shares of the company closed up about 8% at $3.99, well above the private equity firm’s offer of $3.50 per share.
Chico’s said it would review the offer, adding that Sycamore had previously offered $4.30 per share, which it had rejected as it “substantially undervalued” the retailer. The company did not disclose the details of the previous offer in its statement.
Earlier in the day, Sycamore said the retailer had declined to discuss the offer with the private equity firm.
Sycamore, which disclosed a 6.6% stake in Chico’s in an SEC filing, also said its stake makes it one of the largest shareholders of the company.
Sycamore declined to comment on Chico’s response. Chico’s said it would not comment beyond its press release.
Chico’s, which is known for its Soma brand of women’s intimate apparels, operates more than 1,000 stores in the United States and Canada and also sells its merchandise online.
The 36-year-old retailer, struggling with lower sales for the last three years, has been looking for a new chief executive officer after Shelley Broader abruptly resigned in April.
“Given the rate and severity of the deterioration of the company’s business, we believe that it is in the best interests of all stockholders for the board to create those options,” Sycamore said in a letter to Chico’s board.
Goldman Sachs & Co LLC is the financial adviser to Chico’s and Paul, Weiss, Rifkind, Wharton & Garrison LLP is its legal counsel.
Source: Reuters.com