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(Reuters) - Private equity firm Apax Partners will acquire teen-apparel retailer rue21 Inc RUE.O in a deal valued at about $1.1 billion, adding to a retail portfolio that includes Cole Haan and Takko Fashion.
Rue21 said Apax, which already owns a 30 percent stake in the company, will pay $42.00 per share in cash, representing a premium of 23 percent to its Wednesday close.
Shares of the company were up 23.2 percent before the bell, indicating that investors may be expecting a higher bid.
The retailer, which has a market capitalization of about $810 million, said it has set up a special committee of independent directors to solicit and evaluate higher bids during a 40-day go-shop period.
The special committee is being advised by Perella Weinberg Partners, as financial adviser, and Kirkland & Ellis LLP and Potter Anderson & Corroon LLP, as legal advisers.
Apax was advised by J.P. Morgan Securities LLC. Simpson Thacher & Bartlett LLP and Richards, Layton and Finger, P.A. acted as legal advisers.
Reporting by Siddharth Cavale in Bangalore; Editing by Roshni Menon