Abercrombie faces rumours of takeoverThursday, 20 September 2012
Abercrombie & Fitch has been lately involved in ever sounding
rumours of a potential takeover. Speculation on a potential race to acquire A&F has pointed out the concern Abercrombie’s strategy is failing, prompting Ralph Whitworth’s Relational Investors LLC to seek changes and the retailer to hire Goldman Sachs Group Inc. for advice, published Bloomberg.
Shares of Abercrombie & Fitch Co.(NYSE:ANF) rallied after CNBC reported that it had retained Goldman Sachs as an advisor due to activist pressure from Ralph Whitworth-led Relational Investors.
According to Wall Street, the stock’s decline has pumped out a potential private-equity buyout, RidgeWorth Capital Management Inc. and Alpine Woods Capital Investors LLC said. Despite different opinions on the hypothetical price for this takeover, it could fetch 55 dollars a share, a 43 percent premium, as Morningstar Inc. said.
The stock has lost 21 percent in 2012, the most among U.S. specialty apparel retailers valued at more than 1 billion dollars, according to data compiled by Bloomberg. Abercrombie’s enterprise value is languishing at 5.1 times projected earnings before interest, taxes, depreciation and amortization this year, less than 89 percent of 18 peers, and its price-to-sales ratio also lags behind 16 competitors, the data show.
Abercrombie & Fitch‘s stock had its “market perform” rating restated by analysts at BMO Capital Markets in a research report issued to clients and investors on 12th September. They currently have a 30 dollars price target on the stock.
Meanwhile, analysts at Piper Jaffray reiterated a “neutral” rating on shares of Abercrombie & Fitch in a research note to investors on Wednesday, September 5th. They now have a 33 dollars price target on the stock. Separately, analysts at FBR Capital reiterated an “outperform” rating on shares of Abercrombie & Fitch in a research note to investors on Tuesday, September 4th. They now have the most optimistic price target on the stock: 45 dollars.