J Crew attracts £1.8bn private equity interest

City A.M. Reporter
J CREW, the US fashion retailer, has agreed to a $2.86bn (£1.8bn) buyout by two private equity firms, although some analysts and bankers expect it could command a higher bid.

Under the proposed deal, former investor TPG Group and Leonard Green & Partners would buy the company for $43.50 a share, a premium of more than 15 per cent compared with J Crew’s share price before the deal was announced.

Millard Drexler will continue as chairman and chief executive officer and maintain a significant equity investment in J Crew. TPG first bought J Crew in 1997 and took it public in 2006. It sold its stake after the IPO.

“It’s still a bargain. You are getting an amazing premium retailer... You have got Mickey Drexler running the place, and he is gold,” said Patty Edwards, chief investment officer of Trutina Financial, which owns J Crew shares.

J Crew shares closed 16.4 per cent higher at $43.82 yesterday.