Ending Lengthy Debate, Talbots Lands $193M Takeover

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Published May 31, 2012

| FOXBusiness

After months of squabbling over the price and a steep share plunge, Talbots (TLB) finally inked a $193.3 million transaction on Thursday to be taken private by Sycamore Partners.

While the $2.75-a-share offer price is well below earlier bids of $3 and $3.05, it was enough to send shares of the women’s apparel maker skyrocketing more than 100%.

The leveraged buyout represents a 113% premium on the company’s closing price on Wednesday and a 76% premium on the closing price on December 6, the day before Sycamore’s initial offer was revealed.

When debt is included, the value of the deal rises to $369 million.

“We are pleased with the value this transaction delivers to our stockholders and believe that this is a positive development for all of our stakeholders,” Talbots CEO Trudy Sullivan said in a statement. “Sycamore Partners is a strong investor with substantial resources and expertise, and we look forward to operating as a private company under their ownership.”

Talbots turned down a more lucrative $212 million bid in December, but the two sides engaged in negotiations, prompting Sycamore to boost its bid to $214.6 million in early May.

Last week Talbots disclosed that it was no longer in exclusive negotiations with Sycamore Partners, sparking a 41% plunge in its shares.

“We believe in the Talbots brand and its more than 8,000 Associates,” said Stefan Kaluzny, a managing director at Sycamore Partners, which is Talbots’ second-largest shareholder.  “We look forward to a long and successful partnership with Talbots serving its many loyal customers.”

Based in Hingham, Mass., Talbots generated annual sales of $1.14 billion, but recently disclosed a 9.1% retreat in first-quarter same-store sales.

Shareholders expressed relief on Thursday that a deal was finally reached as shares of Talbots skyrocketed 101.55% to $2.60 ahead of the open.

The companies said they expect the deal to close in the third quarter.

Bank of America Merrill Lynch (BAC) advised Sycamore Partners on the transaction, while Perella Weinberg Partners served as financial advisors for Talbots.

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