Shares of Aéropostale Inc. jumped 18.1 percent to $10.17 on hopes that Sycamore Partners, after disclosing it took nearly an 8 percent stake in the teen retailer, would take the chain private.
Sources told WWD that Sycamore is considering Aéropostale as its next possible takeover target.
The stake was disclosed in a regulatory filing, a Form 13-D, with the Securities and Exchange Commission on Tuesday.
Securities rules require firms to disclose whenever they take a stake that is more than 5 percent and become what is then called a “beneficial owner.”
In the filing by Hummingbird LLC, which is controlled by Sycamore, the stake held by the private equity firm is nearly 6.3 million shares. The filing said the shares were acquired because of the belief that the stock is “an attractive investment.”
The company also said in the filing — using boilerplate language — that there may be discussions with the retailer’s board concerning the chain’s assets, capitalization, financial condition and future plans.
In addition, Stifel soft-lines retail analyst Richard Jaffe speculated in a research note Tuesday that Sycamore, through Hummingbird, “will attempt to take the company private.” Jaffe added that if one assumes the same multiple as The Talbots Inc.’s going-private transaction, then the hypothetical per-share acquisition price would be $10 to take Aéropostale private.
Sycamore has a history of specializing in the retail and apparel sectors. It previously had a stake in Talbots back in 2011 and then, after months of negotiation, took the retailer private in 2012 in a deal valued at $369 million. Earlier this year, Sycamore acquired teen retailer Hot Topic Inc. for $600 million.
Sycamore has been active prowling for deals. It had lengthy discussions with Australian surf brand Billabong, although that didn’t result in any transaction, and now has joined with KKR & Co. for a combined bid for The Jones Group Inc., having made a first-round offer in the summer. Second-round bids in the Jones asset sale are due at the end of the month.
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