Ann Inc., parent company of the Ann Taylor brand, saw its shares rise 5.2% after the company announced Tuesday that it has entered into a non-disclosure agreement with private equity firm Golden Gate Capital.
Shares closed at $38.71 Wednesday, the company’s biggest gain since late August.
The company said it has been engaged in a “collaborative, constructive dialogue” with Golden Gate—which is known for acquiring retailers—since March when the firm’s investment fund, Golden Gate Capital Opportunity Fund took a 9.6% stake in the retailer, roughly 4.4 million shares. According to a statement, “The Company [Ann Inc.] and Golden Gate believe that, given Golden Gate’s expertise in specialty retail and the positive interactions between the companies to date, it would be beneficial to continue discussions on a more detailed basis.”
A confidentiality agreement filed Wednesday with the Securities and Exchange Commission (SEC) said the discussions were “regarding the Company’s continuing review of options reasonably available to it for enhancing shareholder value.”
Activists investors told Ann Inc. in August that it was dramatically undervalued and urged the company to put itself up for sale. Shares rose as high as 7 percent to $40.13 on the news.
Ann Inc., which also operates LOFT, reported that for the second quarter ended Aug. 2, total net sales were $648.7 million, up from $638.2 million in the prior year period. Net sales for the Ann Taylor brand totaled $250 million, up from $254.2 million in the second quarter of 2013. At LOFT, net sales totaled $398.7 million, up 1.4% from the prior year quarter.
The company will release its third quarter results on Nov. 21.