Chico's FAS (NYSE:CHS) shares have rocketed 62% premarket Thursday after the company said it has agreed on a deal to be acquired by Sycamore Partners for $1 billion.
The acquisition by the private equity firm will see CHS become a private company. Chico's FAS shareholders will receive $7.60 per share in cash, representing a 65% premium to the company's closing stock price on September 27.
"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 Molly Langenstein, Chico's FAS Chief Executive Officer and President. "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 deal is expected to close by the end of the first calendar quarter of 2024. In addition, it includes a 30-day "go-shop" period that will expire at the end of the day on October 27. The "go-shop" period permits Chico's FAS to solicit and consider alternative acquisition proposals actively.