Talbots Extends Period to Consider Takeover Bid

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Hingham, MA—Is Talbots getting closer to a takeover agreement? That might be the case considering the specialty retailer said Tuesday that “based on ongoing discussions” it would extend the exclusivity period with Sycamore Partners for another week.

Earlier this month Sycamore, a private equity firm, increased its takeover offer to Talbots for $3.05 a share, which values Talbots at about $215 million. That deal came with an exclusivity agreement that would have expired May 15. Now the agreement will expire May 22.

The extra time may mean Talbots and Sycamore are closer to coming to a deal, a turnaround from last December when Talbots’ board of directors rejected Sycamore’s first offer for $3 a share, saying it undervalued the company.

Sycamore is Talbot’s second largest shareholder with a 9.9% stake. Stefan Kaluzny, the former Golden Gate Capital executive who runs Sycamore, has said Talbots needs “expeditious action” to turnaround the beleaguered retail brand.

Talbots announced last year that it would examine strategic alternatives, including a sale, as it struggled to turnaround business. The company has shuttered underperforming doors, cutback on advertising/marketing and eliminated jobs as part of its turnaround plan.

In April, Talbots reported that it lost $111.9 million last year.

Talbots said it does not intend to comment further regarding the negotiation with Sycamore Partners or its strategic alternatives, “unless a specific transaction is recommended by the board.”

 

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