A takeover of Stage Stores Inc. at a 100 percent premium might be just what it sounds like — too good to be true.
A mystery entity, HMA Acquisition Inc., told the U.S. Securities and Exchange Commission in a filing that it’s ready to make an offer to Stage Stores’ board of directors for all of the company’s stock at $4.60 per share.
Such an offer would be well above the retailer’s opening stock price of $2 on Thursday. Wall Street’s first reaction to the filing was positive as the stock immediately dug itself out of steep declines and jumped up to $2.37. But the excitement was short-lived and shares of the department store proceeded to drop again. The stock closed down 8.6 to $2.12, leaving it with a market capitalization of $57.3 million.
The skepticism seems to be warranted.
A phone number for the San Francisco office of HMA and its purported parent company, HM Avenue Investment Partners II LP, listed on the SEC filing appears unaffiliated with either company and an office address could not be confirmed.
For its part, Stage Stores seemed to be having similar troubles reaching its would-be suitor.
The company issued a brief statement in response to the HMA filing saying it “has not received any offer or other communication from” HMA and added Stage Stores “has not been able to confirm that such an entity exists.”
A representative for Stage Stores could not immediately be reached for comment.
While the over the top bid could not be confirmed, the company could certainly use a shot in the arm.
Stage Store ended 2016 with a net loss of $38 million, or $1.40 per diluted share, on sales that decreased more than 10 percent to $1.4 billion . Comparable store sales dropped by 8.8 percent.
The company also said it closed 37 stores over the year.
Moving into 2017, Stage Stores expects the year to be similarly dismal, with sales dropping to $1.3 billion and comparable-store sales dropping again by as much as 8 percent. Losses per diluted share are expected to be between 95 cents and $1.55.
“As we look ahead to 2017, we expect external headwinds and customer behavior changes to persist,” said Michael Glazer, Stage Stores’ chief executive officer. “We will take steps to drive improved performance by focusing on sales in key merchandise categories, creating an exceptional customer experience in our stores and online, and raising the level of engagement with customers through our marketing.”