Hot Topic – which is listed on the New York Stock Exchange – closed at $10.75 per share yesterday compared with Sycamore’s offer of $14 per share, valuing the business at $600m.
The bid has been unanimously approved by the retailer’s board of directors and is now subject to shareholder and regulatory approvals.
Lisa Harper, Hot topic chairman, said, “We are very excited about the future growth for the company and know that Sycamore Partners will provide great resources and expertise to us as we operate as a private company.”
Harper and Becker Drapkin Management, which hold a combined stake of 8.9 per cent in the company, have agreed to support the proposed deal.
In the meantime, Sycamore expects to conclude its due diligence of Australian surfwear brand Billabong this month.
Naude and Sycamore revealed their A$1.10 per share offer in December backed with debt financing from Bank of America Merrill Lynch – the same day Billabong issued its third profit warning in a year.
Billabong issued its latest profit warning in February.
Back in June last year Sycamore completed its $369m majority purchase of women’s clothing retailer Talbots – two and a half months after agreeing to buy the company.
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