Boston, MA 08/26/2014 (wallstreetpr) – The Hedge fund Red Alder and the Activist Investor Engine Capital have urged Ann Inc (NYSE:ANN) to consider the option of sale for enhanced performance. The investors consider the parent company of the Ann Taylor stores as a suitable acquisition candidate. They value Ann at $50 to $55 a share and strongly believe that it can fetch a premium of around 33% to 46.5% on the current stock price. Red Alder and Engine Capital together own more than 1% of Ann Inc. stock.
The suitable candidate
Ann Inc (NYSE:ANN) has given consistent performance throughout the years. The investors mentioned that Ann can further look for expansion in margins and free cash flow generation with the sale. The potential acquirer can be a large international retailer who can acquire the iconic brands of Ann and give it a solid platform for international expansion. As of now, Ann has got more than 1,000 stores under the brand names of Loft and Ann Taylor. The investors held the talks regarding the sale of the chain with the management that ended with a cold response.
The response
The investors said that the status quo of Ann Inc (NYSE:ANN) is untenable and, therefore, the board of directors should appoint an investment bank and form a special committee including independent directors to consider the strategic options. At this point, the opinions of Golden Gate Capital will matter a lot as it is a private equity fund that bought a 9.5% stake in Ann this year. It has yet not forced the company to make changes in the board or got for the sale of the chain. Also, its opinions will weigh as it is considered as one of the firm with a strong presence in the retailing investments. Ann Inc. has said that the management is ready for open communications with the shareholders.
