Costume jewelry retailer Claire's Stores has agreed to be bought out by by private equity firm Apollo Management LP for $33 per share, or about $3.1 billion, representing a 7.3% premium to the shares' Monday close. The company's shares rose 3.6% to $31.88 on the news. Approximately 70% of the company's sales are in North America, and the sale is expected to assist its expansion into international markets. Claire's already has a JV in Asia and a licensing agreement in place in Turkey and parts of the Middle East. Another private equity firm, Apax Partners, attempted to purchase Claire's but was unable to reach a buyout price acceptable to both sides. Retailers are a popular buy among private equity firms: Dollar General, grocer Albertson's, crafts company Michaels Stores and luxury department store Neiman Marcus were all recently taken private. According to the Wall Street Journal, Claire's, with its "maturing operation with little or no debt but strong cash flow," represents an "ideal" buyout candidate. The retailers in which Apollo holds or has held a stake include Linens 'n Things, General Nutrition Centers, Zale's and Rent-A-Center.
Sources: Bloomberg, Reuters, MarketWatch, Wall Street Journal
Commentary: Retail Same-Store Sales Roundup • Jim Cramer's Mad Money Lightning Round Picks, Oct. 17
Stocks/ETFs to watch: Claire's Stores, Inc. (CLE). Competitors: Tween Brands, Inc. (TWB), Wet Seal Inc. (WTSLA)
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