Talbots Takeover to Close Today

Hingham, MA—A new chapter begins today for Talbots, the 516-unit women’s specialty chain that has been struggling to turn itself around. Sycamore Partners, the New York-based private equity firm, said Thursday it had completed its tender offer of $2.75 a share, amounting to about 83.6% of the outstanding shares in the retailer.

Accordingly, Sycamore Partners intends to “promptly move forward with a ‘short-form’ merger under Delaware law that should make Talbots a wholly owned subsidiary of its TLB Holdings LLC beginning today. Talbots’ stock will then cease trading on the New York Stock Exchange.

Sycamore, which is headed by Stefan Kaluzny, formerly of Golden Gate Capital, was Talbots’ second largest shareholder with nearly a 10% stake. Talbots accepts its bid in May after two previous attempts—at a higher offer—failed. The deal has been valued at about $369 million which includes $176 million in debt.

“We believe in the Talbots brand and its more than 8,000 associates,” Kaluzny said when the deal was made. “We look forward to a long and successful partnership with Talbots serving its many loyal customers.”

In 2011, Talbots lost $111.9 million, or $1.62 a share, compared with earnings of $10.8 million, or 16 cents per share, in the prior year. Full year sales dropped 6% to $1.14 billion. Consolidated comparable sales slipped 5.6%, while comparable store sales dropped 5%.

In his original letter to the board in its first bid last December, Kaluzny wrote: “Other than Sycamore, we believe there are, at best, a very limited number of potential acquirers who have the relevant experience, skills, interest and capital to invest in a struggling apparel company such as Talbots.”

Talbots will be Sycamore’s first acquisition of a public company, according to Bloomberg data.



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