Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.Mandatory Credit: Photo by AP/REX/Shutterstock (8840628b)A store window reflects a street scene at an Abercrombie & Fitch store on New York's Fifth Avenue. Abercrombie & Fitch Company reports earnings, Thursday, May 25, 2017Earns Abercrombie Fitch, New York, USA - 22 May 2017

The rubber is about to meet the road for Abercrombie & Fitch Co. — and Express Inc. and BCBG Max Azria might be the next two to enter retail’s deal-making race.

Abercrombie, which acknowledged last month that it was in talks to sell itself, is set to accept bids in an auction today — and the specialty chain might just be going at a discount.

A source close to the situation said Abercrombie’s board started the process of looking to sell for $14.50 to $15 a share, but given the deepening secular shifts and weakness in retail, is resigned to accepting something closer to $13.50.

Shares of the firm slipped 2 percent to $12.07 Wednesday, about where they were trading before word of a potential transaction pushed the stock above $14. That price ended up being unsustainable as dark clouds continue to gather over retail and Abercrombie posted wider first-quarter losses on a 3.6 percent decline in sales.

Abercrombie has a market capitalization of $820.9 million.

Despite widespread worries about the future of mall-based businesses, especially those courting younger consumers, Abercrombie has sparked some interest.

Financial sources said the most prominent bidder is a team-up — competitor American Eagle Outfitters Inc. and private equity firm Cerberus Capital Management.

Private equity firm Sycamore partners and mall rival Express Inc. are also said to be weighing separate bids.

Led by Stefan Kaluzny, Sycamore has proven to be one of fashion’s most voracious acquirers, buying Belk Inc., Hot Topic Inc., Jones Apparel Group, Talbots, The Limited and others.

But Express is stuck somewhere betwixt and between. The retailer is said to have been contemplating a stock and cash offer for Abercrombie, but over the past month, Express’ shares have fallen from $9 to $6.70, making them a less-valuable currency in any transaction.

Express is also said to be a takeover target, with longtime suitor Sycamore again exploring an acquisition of the chain.

And that’s not all for Sycamore, which shouldn’t be too much of a surprise since the mall has become a playground for a deep-pocketed investor with a taste for retail and the stomach to do distressed deals, like Kaluzny. Sycamore is also said to been on eyeing BCBG Max Azria Group, which filed for bankruptcy protection in February after its debt load finally proved to be too heavy.

A spokesman for Sycamore and a spokeswoman for Cerberus declined to comment Wednesday, while representatives for Abercrombie, American Eagle and Express did not return queries.

A flurry of dealmaking can be a signal of strength or misfortune for a sector. The market is booming in beauty where indie brands are sprouting up and quickly find themselves targets, with strategic giants and private equity players fighting over who can grab growth with the latest name. But in retail, where e-commerce and changing Millennial preferences are still being seen more as challenges to be overcome than opportunities, companies are starting to look more like life rafts cast out to sea and looking to link up with another to stay afloat.

One retail dealmaker noted that an Abercrombie and American Eagle merger could create “huge overhead savings,” on the order of $100 million to $200 million a year.

“The problem is you get a wasting asset and what’s there at the other end of this?” the source said. “It’s like a roach motel deal: Easy to get in, difficult to get out. Those companies are really more in the bull’s eye than anything else because their demographic is shopping more and more on the phone.”

Others have said that American Eagle was at least a much better fit for Abercrombie among the strategic players in the process since a combination with Express would amount to “putting two problems together for one bigger problem.”

American Eagle has a similar demographic to Abercrombie, as well as price points, the analyst noted. The two companies could also benefit from supply chain and real estate synergies.

CL King analyst Steven Marotta, who has a “neutral” rating on shares of Express, wrote in a recent research note about a potential Abercrombie and Express combination and noted negative trends at both businesses.

“Out of the gate, we are somewhat skeptical of a successful transaction and even more skeptical of a practical (i.e., multiyear accretive) outcome,” he said.

Marotta also said “similarly successful specialty retail deals are a scant few in recent memory,” and noted that “efforts to cobble together multiple domestic retail brands under one corporate umbrella have often proven more problematic than effective for the surviving company.”

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