rue21, inc. (RUE), a specialty apparel retailer of girls and guys apparel and accessories, and private equity firm Apax Partners Thursday announced a definitive agreement for funds advised by Apax Partners to acquire all outstanding shares of rue21 for $42.00 per share in cash. The transaction is valued at about $1.1 billion.
The transaction price represents a premium of 23 percent to Wednesday's closing share price. The rue21 Board of Directors approved the agreement based on the unanimous recommendation of a Special Committee comprised of three independent directors.
As part of the agreement, the Special Committee, with the assistance of its advisors, will conduct an initial 40-day "go-shop" process starting today. During this period, it will solicit, evaluate and potentially enter into negotiations with any parties willing to offer a superior acquisition proposal. The go-shop process provides for a low termination fee of 1 percent to be paid to Apax.
rue21 also announced preliminary earnings per share and comparable store sales results for the first quarter ending April 30. Net sales for the quarter increased 9.1 percent, while comparable store sales decreased 4.6 percent from the year-ago quarter. Earnings per share is expected to be $0.44.
On average, 7 analysts polled by Thomson Reuters expect earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.
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