Private equity firm Golden Gate Capital has acquired a 9 percent stake in Ascena Retail Group Inc.
Golden Gate holds nearly 17.5 million shares of the retailer.
In a filing with the Securities and Exchange Commission on Thursday, the company said it believes that Ascena “common stock is an attractive investment that is significantly undervalued, presenting an opportunity for a firm such as Golden Gate to become a significant shareholder in a scale, high-quality, and well-managed business at a very attractive valuation.”
The filing also said Golden Gate is “in the early stages of discussions” with Ascena, its management team and the board, and it looks forward to “engaging in a collaborative and constructive manner” to helping the company “in achieving its substantial potential as a public company.” It also said Golden Gate plans to “leverage” its significant retail expertise and public and private equity experience to assist in creating value” for Ascena shareholders.
According to the filing, those discussions may concern “business, assets, capitalization, financial condition, operations, management, strategy and future plans” of Ascena.
The filing included a letter dated Oct. 8 from Golden Gate to Ascena president and chief executive officer David Jaffe.
In the letter, the private equity firm said: “We endeavor to operate in a transparent and straightforward manner, and we intend to be a long-term holder with a multiyear investment horizon, working collaboratively with management and the board to help achieve a business’s full potential as a stand-alone public company. We do not invest with the intention to put companies ‘in play’ or to change management or directors. We believe our strategy delivers strong returns for Golden Gate’s investors and creates value for the other stakeholders of the companies in which we invest.”