May 24, 2013 2 min read

NEW YORK – Clothing and accessories company Rue21 has agreed to be taken private in a nearly $1 billion deal with private equity firm Apax Partners.

Shares hit an all-time high Thursday.

The company, headquartered in Warrendale, Allegheny County, has a number of stores in the Pittsburgh region. They include Tanger Outlets in South Strabane Township; Robinson Town Center; and Triadelphia and Morgantown in West Virginia.

Apax will pay $42 per share, a 23 percent premium to Rue21 Inc.’s Wednesday closing price of $34.12. The companies put the deal’s total value at $1.1 billion.

Rue21 has about 23.7 million outstanding shares, according to FactSet.

The company’s stock jumped $7.75, or 22.7 percent, to $41.87 in midday trading. The shares touched the offer price of $42 earlier in the session.

Rue21’s board approved the transaction based on a unanimous recommendation by a special committee made up of three independent directors.

Rue21 has a 40-day “go-shop” period during which it can actively solicit parties that may be willing to present a superior bid. If Rue21 does enter a deal with another party, it would have to pay a termination fee of about $10 million to Apax.

The transaction is not subject to a financing condition. Rue21 said that it will keep its headquarters north of Pittsburgh after the buyout is complete.

The acquisition is expected to close before year’s end. It still needs approval from a majority of stockholders not affiliated with the SKM II funds, which own about 30 percent of Rue21’s outstanding stock.

Rue21 also said it anticipates fiscal first-quarter earnings of 44 cents per share. Analysts polled by FactSet predicted earnings of 48 cents per share.

Quarterly revenue rose 9.1 percent. Revenue at stores open at least a year, a key gauge of a retailer’s health, fell 4.6 percent. This metric excludes results from stores recently opened or closed.

Rue21, which runs 932 stores in 47 states, will report its full first-quarter results June 5.