Golden Gate Capital discloses 9.5 percent stake in retailer Ann
(Reuters) - Private equity firm Golden Gate Capital disclosed a 9.5 percent stake in women's apparel retailer Ann Inc (ANN.N) and said it believed the company's stock was significantly undervalued.
Shares of Ann, which owns the Ann Taylor and Loft chains, rose 11.5 percent in extended trading.
"We believe that Ann is a great business, with a thoughtful strategy, led by an extremely competent management team who has a long track record of success," Golden Gate said in a letter to Ann's chief executive and chief financial officer.
Golden Gate said in a regulatory filing that it owned about 4.4 million shares of Ann as of Thursday, making it the company's largest shareholder.
Ann, whose rivals include Express Inc (EXPR.N), reported last week a better-than-expected profit for the fourth quarter ended February 1 as shoppers snapped up the trendy merchandise at Loft stores.
The company's quarterly profits have beaten analysts' estimates for the past two years, making it one of the few retailers that have weathered enduring weakness in U.S. consumer spending.
Ann's shares closed at $37.23 on the New York Stock Exchange on Thursday. The stock has risen about 20 percent in the year to Thursday's close.
(Reporting by Maria Ajit Thomas in Bangalore; Editing by Kirti Pandey)