* Says Sycamore bid "opportunistic"
* Says Talbots recent performance distorted by merchandise
* Says bids should take into account company's historical
By Nivedita Bhattacharjee
Dec 8 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 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
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.