Back on Nov. 23, J. Crew agreed to be acquired by the two buyout firms for $43.50 per share in cash -- a 29% premium to J.Crew's average closing share price over the previous month. This was the largest retail offer the last year, according to Bloomberg. The agreement between the two also allowed J. Crew to "solicit, receive, evaluate and enter into negotiations with respect to alternative proposals" -- basically shop the company around -- through Jan. 15.
Now, department store operator Sears and apparel retailer Urban Outfitters are studying J. Crew's books, Bloomberg reported. But neither company has indicated whether it will actually counter the private equity firms' offer, the sources said.
A $27 Million Break-Up Fee
Other than the retailers, it seems that at least two other private-equity firms are also receiving confidential data on J. Crew, according to Bloomberg.
J. Crew has 250 stores -- including 221 J.Crew retail stores, nine crewcuts and 20 Madewell stores -- and 85 factory outlet stores. An acquisition might help boost operations at struggling Sears, still faces increased competition and lower traffic. The parent of Sears and Kmart stores reported a wider third-quarter loss as sales fell 5%, especially in its namesake stores. As for hip Urban Outfitters, it seems investors see a match with J. Crew less appealing.
J. Crew climbed around 2% by midafternoon, to $44. Sears advanced some 1.2% to $72.31, but Urban Outfitters fell 0.45% to $35.73.