Chico’s FAS, Inc. (NYSE: CHS) announced on Thursday that it has entered into a definitive agreement to be acquired by private equity firm Sycamore Partners. Upon completion of the transaction, Chico's FAS (NYSE:CHS) will become a privately held company.
Shareholders of Chico's FAS will receive $7.60 per share in cash, representing a 65% premium to the company's closing stock price on Wednesday, September 27, 2023. The transaction is expected to close by the end of the first calendar quarter of 2024, subject to customary closing conditions and approvals.
The definitive agreement includes a 30-day "go-shop" period that will expire at 11:59 PM ET on October 27, 2023. This permits Chico's FAS and its financial advisor to actively solicit and consider alternative acquisition proposals.
Chico’s FAS, a specialty retailer of women’s private branded casual-to-dressy clothing, intimates, and complementary accessories, operates under the Chico’s, White House Black Market (WHBM), and Soma brands. The company's shares moved up significantly on Thursday, with approximately 29.78M shares exchanged as compared to an average 30-day volume of 2.2M shares.
According to InvestingPro data, Chico's FAS has a market cap of $925.78M and a P/E ratio of 6.88. The company has been trading at a low earnings multiple and has a high shareholder yield, as per InvestingPro Tips. This could be indicative of the company's financial health and attractiveness to potential investors.
"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 Molly Langenstein, Chico's FAS Chief Executive Officer and President.
Kevin Mansell, Chair of the Chico's FAS Board of Directors, added that the agreement validates Chico's FAS's leadership as a customer led, product obsessed, digital first company with a strong record of operational excellence.
Upon completion of the transaction, Chico's FAS common stock will no longer be listed on the New York Stock Exchange. The company's share prices have moved between a 52-week high of $7.51 and a 52-week low of $4.33. Interestingly, the company was trading near its 52-week high, as per InvestingPro data.
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