In October, the company said in a regulatory filing that it would work with JPMorgan Chase & Co to review strategic alternatives for the business, including a potential sale, and now, according to Bloomberg, which cited unnamed sources with knowledge of the situation, Ann Inc. is working with at least two buyout firms and has considered selling a stake or preferred shares of the company to a private equity firm.
The company’s shares rose by more than 7 percent to $37.73 Friday, the day’s high, following news of the potential sale, though in the last three months, shares have fallen 5.1%.
Ann Inc. has been under pressure to explore alternatives for the business since August when hedge funds Engine Capital LP and Red Alder LLC said the company should mull a sale. At the time, Ann Inc. was trading at $40 per share and the hedge funds felt the company could pull $50-$55 per share in a buyout.
Early last year, San Francisco-based private equity firm Golden Gate Capital took a 9.5% stake in Ann Inc., making it the company’s largest shareholder, and said the stock, which it paid less than $35 per share on average for, was undervalued.
Golden Gate has not expressed any intention to make an offer for the company and said back in August that it would work with Ann Inc. as a long-term public investor.