NEW YORK ( TheStreet) -- Private equity firm Sycamore Partners has walked away from a second buyout offer for struggling woman's retailer Talbots (TLB), after two bids and a half-year tussle didn't get it very far.
On Friday, Sycamore let its $3.05 a share bid for Talbots, worth roughly $215 million, expire after it had already upped a previous all-cash bid and extended deadlines for the Hingham, Mass-based retailer. Talbots shares plunged in early Friday trading by as much as 35%. It mattered little that the company, which has struggled to meet sales goals, reported a first quarter profit of 2 cents a share on better than forecast revenue on Friday, beating estimates of a loss and marking a return to profitability after a loss-making 2011.
Talbots will now consider a new buyer, while it also cuts stores and searches for a new CEO. Talbots said it remains open to a deal, but the exclusivity agreement on Sycamore's May 5 bid has expired, allowing the women's retailer that caters to the baby boomer generation seek other buyers. Talbots said it was still considering the offer so long as details are hammered out on the deal's closing and financing.
In January, shares of Talbots (TLB) surged after CNBC reported that private equity firms Golden Gate Capital and TPG Capital were interested in buying the struggling retailer after Sycamore's initial $3 bid got it nowhere. Just days later, Sycamore returned with a new buyout offer.In December, Talbots rejected Sycamore Partners $3 a share cash bid, saying that it was "inadequate and substantially undervalues the company." At the time of its bid, Sycamore owned 9% of Talbot's shares and was willing to pay a 92% premium. Talbots subsequently put itself up for sale and opened its books to Sycamore in on Jan. 30, prompting a new bid valued at $3.05. Shares of the women's retailer fell as low as $1.65 in early Friday trading. Talbots fell nearly 70% in 2011 after its quarterly losses accelerated. The Friday morning share mark is Talbot's lowest trading level since Sycamore Partners emerged as a takeover bidder.