NEW YORK (TheStreet) -- Shares of Abercrombie & Fitch (ANF) are slightly higher at $28.50 in pre-market trade after Bloomberg reported that private equity firms are focused on the specialty retailer following the departure of its CEO Mike Jeffries.
That clears the way for any suitors interested in the teen retailer, Bloomberg said.
Jeffries, 70, was long seen as an obstacle to a takeover. At least one buyout firm considered a deal before walking away over concerns about his leadership, a source told Bloomberg two years ago. For buyers wanting to take another look, the stock is just as cheap now.
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As the $2 billion chain has lost appeal among teens, Abercrombie's stock price has also deflated and even attracted activist shareholders including Ralph Whitworth, Bloomberg noted, adding that it's been mentioned by retail analysts as a top leveraged-buyout candidate in recent years because the business generates cash, has a valuable brand and needs some sprucing up -- hallmarks of LBO targets.
Separately, TheStreet Ratings team rates ABERCROMBIE & FITCH as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ABERCROMBIE & FITCH (ANF) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity."