Monday, February 06, 2006

Hit #80

J. Jill (JILL) is being acquired by Talbots for $517 million in an all-cash deal. The offer, of $24.05/share is a premium of 91.6% over my average cost of $12.55/share.
One can only hope that J Jill clothes don't start looking as drab as Talbots'!

I had posted earlier about Jill, when Liz Claiborne had shown interest.

Having lost out on this, Liz has announced that it is still looking to make acquisitions. May I suggest Bebe ? Bebe has appreciated considerably in recent weeks after bottoming out at around $12, when I was considering opening a position, but it is still a good takeover bet. Takeover or not, the world will definitely be a better place if more members of the fairer sex switched to wearing Bebe!

Talbots, even having overpaid for J Jill, comes out stronger from this deal, as long as the 2 brands are operated independently given that they address two different, dare I say completely different, clientele. I would have gladly settled for a stock swap, since Talbots' stock is relatively cheap and pays a 1.8% dividend too.

Like Liz Claiborne, Ann Taylor must also be contemplating an acquisition to challenge this new combine.

Previous hit - Intrado (#79)


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