- Prachi Singh |
Chico's FAS, Inc. has rejected the unsolicited proposal received from Sycamore Partners on May 10, 2019 to acquire the company for 3.50 dollars per share in cash. The company said that after reviewing the proposal in consultation with its independent financial and legal advisors, its board reached a conclusion that Sycamore's proposal substantially undervalues Chico's FAS and is not in the best interests of shareholders.
Commenting on the development, David Walker, Chair of the Chico’s board, said in a statement: "Chico's FAS benefits from a strong operating and financial foundation, including a portfolio of differentiated brands, loyal customers and robust omnichannel capabilities. Sycamore's interest underscores the upside opportunities that these competitive advantages create, but the prices Sycamore has proposed are inadequate and fail to recognize the full value of the Company and its future prospects."
The move follows the Chico’s board's review and rejection of another proposal dated April 14, 2019 from Sycamore to acquire the company for 4.30 dollars per share, which the board also determined substantially undervalued the company and was not in the best interests of shareholders.
"We are encouraged by the direction Bonnie Brooks is taking with respect to our company's merchandising and marketing strategies since being appointed interim CEO. In addition, our search for a permanent CEO is well underway, with great executive candidates who have a proven track record in the apparel industry being considered. We are confident in our ability to fully capitalize on the market positioning of each of our brands to drive topline growth across our portfolio and deliver value to our shareholders well in excess of what Sycamore has proposed," added Walker.