While PetSmart's substantial cash flow made it an attractive buyout candidate, other retailers like Express (EXPR) , Aeropostale (ARO) and American Eagle Outfitters (AEO) have their own strengths. And they're piquing the interest of private equity firms.
Must Read: 10 Stocks George Soros Is Buying
Under pressure from investors, PetSmart agreed to a $8.3 billion buyout deal from BC Partners Sunday -- $8.7 billion including debt. Shares of PetSmart hit an all-time high of $81.44 on Monday, closing up 4.3%, and the stock is still over $81 Wednesday afternoon.
Several clothing retailers -- viewed as ripe for takeovers -- welcomed a significant boost this week in tandem with PetSmart, bucking broader stock market declines.
The number of retail acquisitions has been on the rise, with the retail sector drawing upwards of 50 deals in the second quarter. That's up 52% from the same quarter last year, according to a PricewaterhouseCoopers report.
"We remain optimistic that the retail and consumers sector will continue the positive momentum [as 2014 ends] and outperform the strong activity seen in 2013," PricewaterhouseCooper analysts said in the report.
In other retail and consumer deals this year, Blackstone (BX) acquired Gates Global for $5.4 billion, and Golden Gate Capital acquired Red Lobster Seafood from Darden Restaurants (DRI) for $2.1 billion.
'Outstanding Interest' in Express Buyout
Express, which has been opening more new outlets for its clothes for men and women in their early 20s, has been the subject of takeover rumors all year. Shares are down nearly 27% year-to-date, trading firmly toward the bottom of its 52-week price range of $11.80 to $19.35. In fact, shares are more than 14% off the original 2010 IPO price of $17.
In June, private-equity firm Sycamore Partners disclosed a 9.9% stake in Express, saying it was interested in a full acquisition. The takeover potential has firms like Nomura holding a buy rating.