Ann Inc. shares soared 19% in premarket trade Monday, after the apparel retailer agreed to be acquired by Ascena Retail Group in a cash-and-stock deal that values Ann at about $2 billion. Under terms of the deal, each Ann share will be exchanged for $37.34 in cash and 0.68 of Ascena shares. Based on Friday's closing prices, that values Ann shares at $47 each, or a 21% premium. The merger is expected to close in the second half of 2015, and is expected to add significantly to Ascena's earnings in the first year. Ann is the parent company of Ann Taylor and Loft retail chains, while Ascena's store brands include Lane Bryant, Dressbarn and Justice. Ascena's stock was halted for news dissemination through 8 a.m. Eastern. Ann's stock has gained 6% year to date through Friday, compared with the S&P 500's 3.1% advance.
Copyright © 2015 MarketWatch, Inc.
Continue Reading Below