Market Overview

Ascena Retail, Ann Shares Gain Big on M&A

Share:

Ascena Retail Group Inc (NASDAQ: ASNA), the operator of Dressbarn and Lane Bryant, agreed to buy Ann Inc (NYSE: ANN) for $38.71 in cash and 0.68 per share in stock. The deal works out to a $2.15 billion price tag. Ascena wants to acquire Ann's LOFT and Ann Taylor stores to expand its women's brand.

At Friday's close, Ascena had a market capitalization just slightly higher than the value of the deal - at $2.31 billion. Ascena said the deal would be "significantly accretive" to earnings in the first year, while profits should gain by 20 percent annually in years following.

Ascena's president and CEO, David Jaffe, said the deal "dramatically reinforces our leadership position in women's specialty apparel retailing." He also noted that the deal will drive "immediate, significant and ongoing value" for shareholders.

Ascena's shareholders agree. The stock was trading up 7.3 percent in Monday's premarket, up to $15.25 from a close at $14.21 on Friday. Ann stock gained more than 22 percent following the announcement, with shares trading above $47 per share, up from a close at $38.71 on Friday.

Ascena said it will finance the acquisition through bank debt and that Goldman Sachs and Guggenheim Securities arranged the financing. The deal does not require approval from Ascena's shareholders.

Through Friday, Ann's stock gained 6 percent year-to-date, while Ascena stock gained 13 percent.

Posted-In: Ann Inc ascena retail groupM&A News

 

Related Articles (ANN + ASNA)

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Keefe Bruyette & Woods Initiates QCR Holdings With Outperform

Lannett Signs Definitive Agreement To Acquire Silarx Pharmaceuticals, Inc.