Chico’s FAS stock was soaring more than 60% in premarket trading after the Florida-based fashion company said it was being acquired by Sycamore Partners for $1 billion and would be taken private.
Chico’s shares gained 62% to $7.48. Coming into Thursday’s trading session, the stock had fallen 6.3% this year. Under the agreement, Chico’s shareholders will receive $7.60 a share in cash, a 65% premium to the company’s closing stock price of $4.61 on Wednesday. “Through this investment, we are gaining additional expertise, financial resources and strategic flexibility to fuel the growth of our company and three powerful brands: Chico’s, White House Black Market and Soma,” said CEO Molly Langenstein in the release. “Sycamore Partners has an outstanding record in the retail industry in partnering with management teams to help businesses reach even greater levels of success.
The transaction with private-equity firm Sycamore was approved unanimously by the company’s board and is expected to close by the end of the first quarter of 2024. The agreement includes a 30-day “go-shop” period that expires at 11:59 p.m. Eastern time on Oct. 27, which allows the company and its financial advisor “to actively solicit and consider alternative acquisition proposals.”