Published on 8 Oct 2023 on Zacks via Yahoo Finance

Chico's FAS (CHS) Inks $1B Acquisition Deal With Sycamore

Chico's FAS, Inc. CHS recently entered into a definitive deal with Sycamore Partners to be acquired by the latter. The deal, valued at $1 billion, is anticipated to be closed by the end of first-quarter 2024, conditioned on certain customary closing conditions and approvals.Chico's FAS’ shares surged 63.1% yesterday to eventually close the trading session at $7.52.Based in New York, Sycamore Partners is a private equity firm that specializes in retail, consumer and distribution-related investments. The firm has a total committed capital of around $10 billion.

Inside the Headlines

Chico's FAS believes that the transaction will provide it with added expertise, financial resources and strategic flexibility to boost the growth of its three leading brands, namely Chico's, White House Black Market and Soma. Apart from creating significant opportunities for its more than 14,000 employees and iconic brands, the transaction will also offer a lucrative cash value to Chico's FAS shareholders.Per the deal, Chico's FAS shareholders will be entitled to receive $7.60 per share in cash. The per-share purchase price denotes a premium of 65% to Chico's FAS’ closing stock price on Sep 27. On closing of the transaction, Chico's FAS will operate as a privately held company and will be delisted from the New York Stock Exchange.It’s worth noting that the deal incorporates a 30-day "go-shop" period that will remain valid till the end of Oct 27, 2023. The go-shop period allows Chico's FAS and its financial advisor to solicit other bids.