Talbots Receives Sweetened $211 Million Buyout Offer
HINGHAM (AP) — Clothing retailer The Talbots Inc. said Monday that it has received a sweetened buyout offer from private equity firm Sycamore Partners that values the company at about $211 million.
Sycamore, which is already Talbots largest shareholder with a 9.4 percent stake, is offering $3.05 per share for the company. That’s a 9 percent premium from the stock’s closing price on Friday.
The retailer based in Hingham, Mass., had rejected a $3 per share takeover offer from Sycamore last December, saying it undervalued the company.
Talbots said Monday its board is evaluating the latest proposal and other strategic alternatives.
Talbots had 69.2 million shares outstanding as of Jan. 28, according to a filing with the Securities and Exchange Commission.
The women’s clothing company has struggled for some time, posting annual losses in four of the past five years.
For the fourth quarter ended Jan. 28, Talbots reported last month that it had a net loss of $53.3 million, or 77 cents per share. That compares with a loss of $2.8 million, or 4 cents per share, a year ago. Excluding restructuring and impairment charges and other items, the company’s adjusted loss from continuing operations was 52 cents per share. Revenue dipped 1 percent to $289.4 million.
For the year, Talbots lost $111.9 million, or $1.62 per share. Annual revenue dropped 6 percent to $1.14 billion from $1.21 billion. Revenue at stores open at least a year dropped 5 percent. The gauge is considered a key indicator of a retailer’s health because it excludes the volatility from stores recently opened or closed.
To reverse its fortunes, Talbots laid out plan to cut jobs, close stores, trim employees’ hours, suspend national advertising and TV campaigns and reduce inventory.
It closed 47 locations under its plan during the fourth quarter. It said last month that it plans to close about 110 locations in total, which includes the consolidation of 15 to 20 locations through fiscal 2013.
As of the end of the fourth quarter, it operated 517 Talbots stores in 46 states and Canada.
The company also said last month that it’s continuing with its search for a new president and CEO. Current President and CEO Trudy Sullivan plans to retire as soon as a successor is named.
Its shares slipped 14 cents to $2.64 per share — below the latest offer. They traded as low as $1.46 in December.
Copyright 2012 The Associated Press.