Chico’s FAS Inc. shares rose the most in more than two years on renewed speculation that the women’s apparel chain is a buyout target.
After abandoning a deal to buy Chico’s in February over disagreements about financing, Sycamore Partners has approached the retailer again, Bloomberg News reported on Friday. Chico’s is working with investment bank Peter J. Solomon to explore its options, according to people familiar with the matter, who asked not to be identified because the information is private.
The stock gained as much as 13 percent to $17.01 on Monday in the wake of the report. That was the biggest intraday increase since February 2012, and it followed a 6.7 percent year-to-date decline for Chico’s. The company now has a market value of about $2.3 billion.
Sycamore has made an offer and is lining up financing, according to one of the people familiar with the situation. Chico’s, based in Fort Myers, Florida, also is talking with other private equity bidders, the person said. There is no guarantee of a deal, and a decision is probably weeks away, another person said.
Representatives of Chico’s, Sycamore and Peter J. Solomon declined to comment.
Sycamore, based in New York, has gained a reputation for buying retail brands and working to reinvigorate them. The firm, started in 2011 by two executives from Golden Gate Capital, acquired Talbots Inc. in 2012 and Hot Topic Inc. the following year.
Last month, Sycamore agreed to pay about $2.7 billion for Belk Inc., the 127-year-old department-store chain.
Chico’s emerged as a takeover target after years of slow sales. The company is seen as a chain for older professional women, and it has struggled to connect with younger shoppers. Chico’s biggest shareholder, activist investor Blue Harbour Group LP, has been working with the company to increase shareholder value since 2013, and already successfully agitated for increased buybacks.
Ann Inc., another women’s chain, agreed to be acquired by Ascena Retail Group Inc. for about $2.16 billion in May.