Sycamore Acquiring Chico’s FAS for Close to $1 Billion, Reports Reuters.


Apparel retailer Chico’s FAS has announced that it will be acquired by private equity firm Sycamore Partners in a cash deal worth $938.1 million. This news has resulted in a significant surge in Chico’s shares, increasing by 63% in premarket trading. Under the terms of the acquisition, Chico’s shareholders will receive $7.60 per share, reflecting a premium of 65% compared to the stock’s previous closing price.

Sycamore Partners, known for its investments in retail and consumer sectors, has a stake in several prominent companies, including Belk, Dollar Express, and Hot Topic. The private equity firm has been pursuing Chico’s since 2015, but faced challenges in securing acceptable financing terms. Previously, Sycamore offered $407.8 million in 2019, which was later reduced to $350 million due to Chico’s worsening financial performance. However, these earlier offers were rejected by the retailer’s shareholders.

Chico’s has also faced pressure from activist investor Barington Capital Group, which urged the company to explore strategic options for its brands amidst a decline in its stock price. With about 1,200 stores across the United States, Chico’s reported a slowdown in sales in the latest quarterly results, citing inflation and store closures as significant factors influencing performance. Chico’s CEO Molly Langenstein expressed optimism about the acquisition as it provides the necessary flexibility for the growth of Chico’s three brands, namely Chico’s, White House Black Market, and Soma. The deal is expected to be finalized by the end of the first quarter in 2024, pending regulatory approval.

Source link

Share post:




More like this

Bungie’s Morale Plummets with Sony Takeover Looming

Sony's acquisition of Bungie for $3.6 billion in 2022...

Google upgrades Bard chatbot with next-gen AI model Gemini in major update.

Google is updating its generative AI chatbot, Bard, with...

Apple to escape EU crackdown on iMessage under 13 words

The European Union is considering granting Apple Inc.'s iMessage...

GTA 6 Trailer boosts popularity of 70s rocker Tom Petty in streams

The highly anticipated trailer for Grand Theft Auto 6,...