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Aeropostale in the Takeover Crosshairs?

NEW YORK ( TheStreet) -- Aeropostale (ARO - Get Report) is taking precautions to defend itself over a possible takeover by private equity, according to reports.

The New York Postreported that the teen apparel retailer hired Barclays Capital as a strategic advisor and that management wants to remain publicly traded.

The move comes after two high-profile specialty retail acquisitions by private equity -- J.Crew (JCG) and Gymboree.

The reports are sending shares of Aeropostale climbing 6.4% to $25.10 in morning trading,

Aeropostale has faced some difficulties in the second half of the year, reporting a 1% decline in same-store sales in November, its second consecutive monthly drop.

Indeed, Aeropostale is showing many of the classic signs of a buyout target, said Wall Street Strategies analyst Brian Sozzi. "Am I surprised? No. There are poor [merchandise] assortments coming up until spring, [Meads] was just pushed out, the stock is under pressure and management believes it's undervalued."

Aeropostale also holds significant growth potential with its newest children's concept P.S..

Last week the stock also saw an increase in options activity.

"The reason to stay public reflects management's belief the company could command a greater valuation over the long-term, rather than accepting an opportunistic bid by a PE house," Sozzi wrote.
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