US: Rue21 to be taken private in $1.1bn deal
Teen apparel retailer Rue21 is to be acquired by private equity firm Apax Partners for US$1.1bn, in a move that will enable it to expand its store portfolio and build an e-commerce platform.
Apax Partners will pay $42.00 per share in cash for the company which operates 932 stores - a premium of around 23% on yesterday's (22 May) closing share price.
Chairman, president and CEO Bob Fisch said: "This transaction will allow us to focus on achieving our long-term objectives, including growing our business to over 1,700 stores in the US and successfully implementing new initiatives such as e-commerce and rueMan."
As part of the agreement, a special committee has been set up to conduct a 40-day "go-shop" process during which it will evaluate and potentially enter into negotiations with any parties that make a superior offer.
Rue21 will remain headquartered in Warrendale, Pennsylvania following the deal.
Separately, Rue21 also reported a 9.1% increase in first-quarter net sales, but comparable store sales fell 4.6% due to unseasonably cool weather, higher payroll taxes and delayed tax refunds.
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