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FRCOY Fast Retailing Company Ltd (PK)

35.582
0.452 (1.29%)
09 Dec 2024 - Closed
Delayed by 15 minutes
Name Symbol Market Type
Fast Retailing Company Ltd (PK) USOTC:FRCOY OTCMarkets Depository Receipt
  Price Change % Change Price Bid Price Offer Price High Price Low Price Open Price Traded Last Trade
  0.452 1.29% 35.582 34.94 36.31 35.65 35.44 35.65 30,093 22:00:02

Merger Talks Between J. Crew, Fast Retailing Break Down

18/03/2014 9:50pm

Dow Jones News


Fast Retailing (PK) (USOTC:FRCOY)
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Merger discussions between apparel chain J. Crew Group Inc. and Japan's Fast Retailing Co. have broken down, said people familiar with the matter, dampening the prospects for a deal that would create a global retailing behemoth.

Fast Retailing, which owns the Uniqlo clothing chain, walked away from discussions with J. Crew management and the company's private-equity owners soon after The Wall Street Journal and others reported on the talks in late February, the people said. While it isn't clear exactly why the talks broke down, some of the people said the fact that they became public played a role.

The end to the discussions could prove temporary and both companies could renew them down the road, the people added. It is also possible another bidder could step in with an offer for J Crew. In the meantime, the dissolution of the discussions makes it more likely that J. Crew's owners will seek to take the company public. The company's owners were looking for as much as $5 billion in the discussions with Fast Retailing, people familiar with the matter have said.

The merger discussions picked up momentum late last month as J. Crew's owners, private-equity firms TPG and Leonard Green & Partners LP, started laying the groundwork for an initial public offering of stock for the retail chain sometime later this year. Goldman Sachs Group Inc. is in the early stages of doing work for J. Crew on a potential IPO.

Fast Retailing, with a market capitalization of about $37 billion and more than 23,000 employees, has ambitions to be the largest clothing retailer in the U.S., and eventually, the world. Uniqlo, which has more than 1,200 stores in Asia, has only a handful in the U.S. A Fast Retailing executive has said U.S. stores will ultimately number in the hundreds.

Private-equity firms often pursue a so-called dual track process to sell an investment, preparing a company they own for an IPO while simultaneously soliciting bids for an outright purchase. Buyout firms usually prefer to sell companies they own in a merger deal so they can reap profits immediately, whereas an IPO comes with complications such as selling restrictions and a need to time trades well to cash out at attractive prices.

TPG, Leonard Green and J. Crew Chairman and Chief Executive Millard S. "Mickey" Drexler took the New York retailer private in 2011 for roughly $2.8 billion. With the stock-market trading around record highs, J. Crew's owners decided to begin exploring an IPO to be ready should the rally continue into the summer, the people said.

Fast Retailing Chief Executive Tadashi Yanai, one of Japan's richest men, has long admired Mr. Drexler, who as chief executive of Gap Inc. increased its sales to $14.5 billion from $4.45 billion over a seven-year stretch between 1995 and 2002.

Dana Mattioli contributed to this article.

Write to Mike Spector at mike.spector@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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