Troy Green • 11 Comments
Dec. 9, 2014, 4:04 PM
- P-E firms apprehensive about making a bid for Abercrombie & Fitch (NYSE:ANF) with Mike Jefferies on board now have a clear path to put pencil to paper, reports Bloomberg.
- Detailed LBO analysis has shown the struggling retailer could generate powerful internal rates of return in a buyout scenario.
- A possible sticking point could be the increased regulatory pressure on bankers with leveraging guidelines - a development which has slowed the PetSmart buyout.
Nov. 27, 2013, 7:19 AM
- While the focus in the teen retailing space is on a potential LBO for Aeropostale (ARO), FBR says Abercrombie & Fitch (ANF) may be the better bet.
- "We performed an LBO analysis on the teen players (AEO, ANF, ARO), which have seen their valuations decline over the past few months. ANF ranks the highest in terms of potential (34% IRR), followed by ARO (29% IRR), and AEO (25% IRR)."
- "In our view, ANF currently has the best combination of valuation, FCF, potential for operating improvement, and ability to take on leverage of the three teen retailers, although we acknowledge that a successful LBO may require a change in management. While there is much interest in ARO, its current valuation, required leverage, large capital requirement for significant improvements in profitability, and now management backlash could make it a feat much more difficult than with ANF. We believe an LBO of AEO is prohibitive given its current valuation and less opportunity to improve since it has been the best run of the three companies."
- FBR maintains an Outperform rating and $43 price target on ANF, a Market Perform and $15 price target on American Eagle Outfitters AEO, and a Market Perform rating and $10 price target on ARO.
Mar. 23, 2012, 5:34 PMAbercrombie & Fitch (ANF -1.4%) underperformed today, possibly thanks to an article from The Deal noting industry skepticism about LBO interest. Abercrombie's weak results and the challenges involved in obtaining debt financing are cited as key obstacles. Moreover, management is said to be wary of making a deal, and P-E firms don't like the volatile nature of the specialty apparel retail space. | Mar. 23, 2012, 5:34 PM | 3 Comments
Mar. 20, 2012, 9:05 AM
Abercrombie and Fitch (ANF) is seen as a potential LBO target following bullish options activity, Bloomberg speculates. Cowen thinks the teen retailer could get $70/share in a takeover, and Morningstar says ANF boasts strong free cash flow while remaining relatively debt-free - "It's got all the characteristics you like to see" in an LBO. ANF +2.7% premarket.| Mar. 20, 2012, 9:05 AM