Women's apparel retailer Talbots (NYSE:TLB) announced Thursday an agreement to be acquired by Sycamore Partners for approximately $193.3 million in cash, much lower than the private equity firm's earlier offer.
Under the terms of the deal, Sycamore will commence a tender offer for all of Talbots' outstanding shares, for $2.75 per share in cash.
The announcement comes less than a week after Talbots said on Friday that months of talks between the two parties had ended without a merger agreement, which sent its shares plunging 41 percent. Sycamore was not prepared to acquire the company for $3.05 per share.
In December last year, Talbots rejected a $3.00 per share offer from Sycamore.
Talbots' business has been declining, with efforts by the retailer to reach out to younger shoppers failing.
The current purchase price of $2.75 a share represents a 113 percent premium to yesterday’s closing price, and a 76 percent premium to the closing price on December 6, 2011, the day before Sycamore’s first offer to acquire the company was revealed.
Including net debt assumption, the transaction is valued at roughly $369 million.
“We are pleased with the value this transaction delivers to our stockholders and believe that this is a positive development for all of our stakeholders," said Talbots’ president and CEO, Trudy Sullivan.
"Sycamore Partners is a strong investor with substantial resources and expertise, and we look forward to operating as a private company under their ownership."
The deal's announcement followed a strategic review undertaken by the Talbots board to maximize stockholder value.
Terms have been approved by the company’s board, and the deal is expected to close at the end of the third quarter.
"We believe in the Talbots brand and its more than 8,000 Associates," said Stefan Kaluzny, a managing director of Sycamore.
"We look forward to a long and successful partnership with Talbots serving its many loyal customers."
Talbots is a women’s apparel, shoes and accessories retailer, operating 516 stores in 46 states and Canada.
New-York based Sycamore Partners is a private equity firm specializing in consumer and retail investments.