The Talbots stock price plummetted 41.02% on Friday, as the break of the exclusive merger talks between the famous American women apparel retailer and its largest shareholder, private equity firm Sycamore Partners.
The Talbots (TLB) said that if Sycamore could provide certainty to complete the transaction and financing commitments, then it would remain willing to accept the takeover offer price of $215 million, or $3.05 per share, proposed by Sycamore, but the Sycamore is not prepared to do so right now.
The exclusive agreement between the parties was invalid on Thursday, despite the previous valid term of the agreement has twice been extended.
The Talbots owns and operates about 540 stores in the United States and Canada, the company was once a classic brand favored by many women in the United States, but in recent years it has lagged behind its competitors such as Ann Inc (ANN), Chico, ‘s FAS Inc. (CHS), meanwhile its sales have declined for the fifth consecutive year.
In December last year, Sycamore intended to purchase The Talbots for $3 per share, but the latter refused for an excuse of too low price. Earlier this month, Sycamore lifted its offer price to $ 3.05 per share.
Talbots Friday also released first-quarter earnings report, showing a slight increase in its adjusted earnings, benefit from the strict controls of discounts and inventory.
As of the quarter ended April 28, the company posted an adjusted profit of $6 million, or 9 cents per share, up slightly from $5.3 million during the same period of last year. Revenues fell 8.4% to $ 276 million, partly due to store closures. Same-store sales declined 3.8%. The company last year announced it planned to shut about 110 stores before 2013, and it has realized 90 so far.
Affected by the merger break, The Talbots stock price experienced a bad day, with a decrease of 41.02%, or $1.05, to close at $1.51. Over the past 52 weeks, The Talbots stock price traded as high as $4.80 and as low as $1.46; the current shares are closed to the bottom.