Florida-based fashion company Chico’s FAS (NYSE: CHS) skyrocketed in trading on Thursday after it announced that it will be acquired by private equity firm Sycamore Partners, known for its retail investments. The deal, subject to customary conditions and approvals, values Chico’s FAS at $7.60 per share in cash, representing a 65% premium to the stock’s closing price on September 27.
Molly Langenstein, Chico’s FAS’ CEO and President, commented, “Through this investment, we are gaining additional expertise, financial resources and strategic flexibility to fuel the growth of our company and three powerful brands: Chico’s, White House Black Market and Soma.”
The transaction is expected to close in the first quarter of next year, and upon the closing of this acquisition, Chico’s FAS will transition to a privately held company. The agreement includes a “go-shop” period until October 27, 2023, allowing for alternative acquisition proposals.
Will CHS Stock Go Up?
CHS stock has fallen by more than 6% in the past year. Only one analyst has covered the stock in the past three months, assigning a Buy rating and a price target of $7.25. This price target implies an upside potential of 57.3% from current levels.
