FORT MYERS, Fla., May 16, 2019 /PRNewswire/ -- Chico's
FAS, Inc. (NYSE: CHS) (the "Company") today announced that its
Board of Directors (the "Board") has unanimously rejected the
unsolicited proposal received from Sycamore Partners on
May 10, 2019 to acquire the Company
for $3.50 per share in cash.
After reviewing the proposal in consultation with its
independent financial and legal advisors, the Chico's FAS Board
determined that Sycamore's proposal substantially undervalues
Chico's FAS and is not in the best interests of Chico's FAS
shareholders. This follows the Board's review and rejection of
another recent proposal dated April 14,
2019 from Sycamore to acquire the Company for $4.30 per share, which the Board also determined
substantially undervalued the Company and was not in the best
interests of shareholders.
David Walker, Chair of the Board,
said, "Chico's FAS benefits from a strong operating and financial
foundation, including a portfolio of differentiated brands, loyal
customers and robust omnichannel capabilities. Sycamore's interest
underscores the upside opportunities that these competitive
advantages create, but the prices Sycamore has proposed are
inadequate and fail to recognize the full value of the Company
and its future prospects."
"We are encouraged by the direction Bonnie Brooks is taking with respect to our
Company's merchandising and marketing strategies since being
appointed interim CEO. In addition, our search for a
permanent CEO is well underway, with great executive candidates who
have a proven track record in the apparel industry being
considered. We are confident in our ability to fully
capitalize on the market positioning of each of our brands to drive
topline growth across our portfolio and deliver value to our
shareholders well in excess of what Sycamore has proposed,"
continued Mr. Walker.
Following is the full text of the letter that was sent on
May 16, 2019, to Stefan Kaluzny, Managing Director of
Sycamore:
Sycamore Partners Management,
L.P.
9 West 57th Street, 31st Floor
New York, New York 10019
Attention: Stefan Kaluzny, Managing
Director
Dear Mr. Kaluzny:
The Chico's FAS, Inc. Board of
Directors has carefully reviewed your May
10, 2019 proposal to acquire Chico's FAS for $3.50 per share in cash. After conducting
an analysis with assistance from our legal and financial advisors,
the Chico's FAS Board unanimously determined that your proposal
significantly undervalues the Company and is not in the best
interests of Chico's FAS and its shareholders.
We believe your interest in
Chico's FAS underscores our growth and value creation
prospects. Indeed, Chico's FAS benefits from a strong
foundation, including a portfolio of differentiated brands, loyal
customers, robust omnichannel capabilities, and the financial
strength needed to support the work we are doing to improve
performance. We are confident that we can, on our own,
deliver value to our shareholders well in excess of what
Sycamore has proposed.
Accordingly, the Chico's FAS Board
has unanimously determined to reject your proposal. The
members of the Chico's FAS Board have taken, and will continue to
take, their responsibilities to Chico's FAS shareholders
seriously. We remain committed to enhancing value for all
Chico's FAS shareholders and are focusing our attention on the
value creating opportunities and improved topline growth that we
are confident can be realized through the continued execution of
our strategic plan.
On behalf of the Chico's FAS Board
of Directors,
David
Walker
Chair of the Board
Goldman Sachs & Co. LLC is serving as financial advisor to
Chico's FAS, and Paul, Weiss, Rifkind, Wharton & Garrison LLP
is serving as legal counsel.
ABOUT CHICO'S FAS, INC.
The Company, through its brands – Chico's, White House Black
Market, Soma and TellTale™ is a leading omnichannel specialty
retailer of women's private branded, sophisticated,
casual-to-dressy clothing, intimates and complementary
accessories.
As of February 2, 2019, the
Company operated 1,418 stores in the U.S. and Canada and sold merchandise through 83
international franchise locations in Mexico. The Company's merchandise is also
available at www.chicos.com, www.chicosofftherack.com,
www.whbm.com, www.soma.com and www.mytelltale.com as well as
through third party channels. For more detailed information on the
Company, please go to our corporate website at www.chicosfas.com.
The information on our corporate website is not, and shall not be
deemed to be, a part of this press release or incorporated into our
federal securities law filings.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This release contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. The statements, including without limitation
the statements in Mr. Walker's quotes, relate to, among other
things, expectations, estimates and projections regarding the
Company's new leadership and initiatives and are identified by use
of the words "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "plan," "outlook," "predict," "project,"
"should," "strategy," "target," "will," "would," "potential" and
similar terms. Factors that could cause actual results to differ
include, but are not limited to: the extent of the market demand
and overall level of spending for women's private branded clothing
and related accessories; the effectiveness of our brand awareness
and marketing programs; the ability to successfully execute and
achieve the expected results of our business strategies and
particular strategic initiatives (including, but not limited to,
the Company's retail fleet optimization plan, Chico's brand
improvement plan and expanded review of the Company's operations);
and the risk that our investments in merchandise or marketing
initiatives may not deliver the results we anticipate. Other risk
factors for the Company's business are detailed from time to
time in the Company's Quarterly Reports on Form 10-Q, Annual
Report on Form 10-K and other reports filed with the Securities and
Exchange Commission. These factors should be considered in
evaluating forward looking statements contained herein.
Contacts:
Julie
Lorigan
Vice President – Investor Relations,
Public Relations and Corporate Communications
Chico's FAS, Inc.
(239) 346-4199
Barrett Golden / Leigh Parrish
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355 4449
Chico's FAS, Inc. • 11215 Metro Parkway • Fort Myers, Florida 33966 • (239) 277-6200
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SOURCE Chico's FAS, Inc.