REFILE-Top Talbots investor pans Sycamore bid

Thu Dec 8, 2011 2:05pm EST

* Says Sycamore bid "opportunistic"

* Says Talbots recent performance distorted by merchandise issues

* Says bids should take into account company's historical performance

By Nivedita Bhattacharjee

Dec 8 (Reuters) - Private equity firm Sycamore Partners' $ 3 a share bid for Talbots Inc is "opportunistic and a very low offer," a top investor in the ailing retailer said.

On Tuesday, private equity firm Sycamore Partners, which owns 9.9 percent of Talbots, offered to buy the company for about $212 million. Talbots was worth about $110.3 million at the time.

"The company's numbers right now are distorted by merchandising issues, so I wouldn't use the current numbers in valuing it," Mitch Williams, a fund manager at OppenheimerFunds told Reuters in an interview.

Oppenheimer holds a 11.9 percent stake in the company -- making it the biggest institutional stakeholder in the Hingham, Massachusetts based company -- followed by Sycamore, according to Thomson Reuters data.

Williams refused to say what he would consider a fair valuation, but said any offer had to take into account Talbot's historical performance and not just the recent past.

When asked about Oppenheimer's stand, a spokesman for Sycamore Partners said the company had no comment beyond what it said in its recent filing.

However, Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago, who exited the stock prior to the Sycamore bid, deemed the offer "courageous," given the company's recent performance.

"On the basis of where the company is going and what the stock is doing, it is a reasonable offer; but on the basis of where the stock could be worth if they got things turned around, it's a very low offer," Kuby said.

"If I was on the board, I would probably have to put the company up for sale, and see if there was any better offer."

Talbots, once a popular destination for its classic fashions, has been consistently lagging peers Ann Inc and Chico's FAS Inc as the retailer started courting younger shoppers.

That experiment backfired, alienating older core customers, while failing to attract a younger clientele.

The company started the year trading at around $8, and was down to $1.56, just prior to the Sycamore offer. On Thursday morning, it was trading at $2.63 on the New York Stock Exchange.

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