San Diego Charlotte Russe Holding announced Monday that it had agreed to be acquired for about $380 million by private-equity firm Advent International Corp. The price exceeded what two investment firms offered for Charlotte Russe last year in an unsolicited bid that the company’s board rejected..
Industry analysts said the purchase suggests that private-equity deals are starting to come alive after being largely dormant for the past nine months.
In November 2008, Charlotte Russe opposed a takeover offer by investment firms KarpReilly and H.I.G. Capital. The retailer’s board rejected the bid, calling it a “blatantly opportunistic bid to buy Charlotte Russe outside of a competitive process.” The move angered some shareholders. But Advent’s offer price of $17.50 a share is nearly double the $9 to $9.50 a share that KarpReilly had offered.
In January 2009, Charlotte Russe said it was exploring strategic alternatives, and in March, the chain put itself up for sale.
Commenting on the merger agreement, Jennifer Salopek, chairman of Charlotte Russe, said: "This transaction represents a premium of 255% over Charlotte Russe's closing share price on January 21, 2009, the day we announced we were exploring strategic alternatives, a premium of 169.6% over our closing share price on March 11, 2009, the day before we announced we were pursuing a sale process, and a premium of 26.9% over our closing share price on August 21, 2009, the last trading day before the merger agreement was signed."
The tender offer is expected to begin no later than Aug. 31 and expire 20 days later.