Shares of J. Crew Group Inc. skyrocketed 17.5 percent to $44.25 in pre-market trading Tuesday as investors reacted to reports that the company was nearing a buyout deal with TPG Capital and Leonard Green & Partners.
Markets pushed the price of the stock beyond the $43.50 the private equity firms are said to be offering. A New York Stock Exchange spokesman said trading in the stock had been halted pending a news release from the company.
The talks with the firm, led by Millard “Mickey” Drexler, chairman and chief executive officer, were reported by the New York Times late Monday.
J. Crew is scheduled to report third-quarter earnings after the market closes today. TPG has a history with the company and acquired it in 1997.
Nomura analyst Paul Lejuez said it would be a “game changer in the world of specialty retail” if J. Crew were bought out.
“In a space where companies rarely go from the public market to private, this would be the second significant transaction announced in two months,” he said.
Bain Capital Partners completed its $1.8 billion acquisition of The Gymboree Corp. today.
The deal seemed large to many retail bankers when it was announced in October and has focused attention on the sector.
For complete coverage, see Wednesday’s issue of WWD.