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Shares of

J. Jill

(JILL) - Get Free Report

surged Monday after



struck a definitive agreement to acquire the women's clothing retailer for about $517 million, or $24.05 a share.

Talbots emerged as the winning bidder for J. Jill after

Liz Claiborne

( LIZ) reportedly walked away over price. Liz Claiborne's last public offer for J. Jill was $18 a share, made in November.

In premarket trading, J. Jill, which operates 200 stores and has a big catalog and Internet presence, was up $4.40, or 23%, to $23.60 a share.

Talbots, which will pay for the acquisition with money drawn from a new $400 million credit facility, expects the deal to be accretive to earnings in 2006. Talbots operates 1,083 stores with annual revenue of about $1.8 billion. Its market capitalization was about $1.5 billion at Friday's close; J. Jill's was $390 million.

"This transaction brings together two great brands, which share a strong customer-first culture and serve distinct yet complementary segments of the age 35-plus female population," Talbots said. "J. Jill's focus on apparel for a sophisticated casual lifestyle, with artistically inspired styles, provides a perfect counterpoint to Talbots offering of updated modern classics."

"Our intent is to maintain each brand's distinct identity and superior customer experience. Our current plan is to continue to operate separately areas such as merchandising, stores, catalog, Web, marketing, visual and store design. At the same time, we believe we will benefit individually and collectively from the combined talent and expertise of our dedicated associates in both organizations."