(Filed Under Financial and General Interest News). On June 27, Soma’s parent Chico’s FAS again rejected an acquisition offer from Sycamore Partners. The latest bid was for $3 a share, following one for $3.50 on May 10 of this year, and another for $4.30 in April.
Chico’s board “determined that Sycamore’s proposal substantially undervalues” the company and chairman David Walker pointed to “the strong support we have received from numerous Chico’s FAS shareholders for the actions underway to improve the company’s performance,” adding “we are making progress on our new operating priorities and the search for a new CEO, and will remain focused on continuing to execute in these areas.”
Sycamore has long been interested in Chico’s. In February 2015, and again later that summer, Sycamore had reportedly come close to buying the company. The latest offers come after the resignation, in late April, of Shelley Broader as CEO, president and board member, and the appointment of Bonnie Brooks as interim CEO. In February, 2015 the company’s stock was trading over $18. This month it has been trading below $4.
Walker explained in a letter to Sycamore, “as we detailed on our first quarter 2019 earnings call, we have recently made significant changes to the company’s leadership and reset priorities for growth and value creation. We have narrowed our focus and are now solely concentrated on three distinct areas that will positively impact our results, with sales-driving, customer-facing and supply-chain operational initiatives front and center. Implementation is underway; leaders who have successfully completed other apparel retail turnarounds are taking charge; and our search for a new CEO is proceeding ahead of plan with candidates who are enthusiastic about the company and our brands. We are confident that Chico’s FAS is well positioned to deliver value significantly in excess of what Sycamore has proposed.” — NM
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