May 18--Ascena Retail Group Inc., owner of clothing stores Dress Barn and Lane Bryant, said Monday it would buy fellow women's retailer Ann Inc. for $2.15 billion.
The deal increases Ascena's reach in the women's apparel market. By adding the Ann Taylor and Loft brands to its portfolio, which also includes preteen retailer Justice, the Mahwah, N.J., company will become one of North America's largest and most diversified specialty apparel retailers, Chief Executive David Jaffe said.
"This powerful transaction joins two strong and highly complementary organizations and management teams," he said in a statement.
Ann Inc. stockholders will receive $37.34 in cash and 0.68 of a share of Ascena common stock for a price per share total of $47.
The offer represents a 21.4% premium over the Friday closing price of Ann Inc. shares. After closing, Ann Inc. shareholders will own 16% of Ascena.
After the deal was announced Monday, Ann Inc. shares soared $7.51, or 19.4%, to $46.22.
Kay Krill, chief executive of Ann Inc., said the deal would give Ann Inc. a powerful financial base.
"As a member of the Ascena family, Ann will be poised to further enhance and grow our business," she said.
Ascena operates about 3,900 stores in the U.S. and Canada. As of January, Ann Inc. had 1,090 stores in the U.S., Puerto Rico and Canada.
The deal is expected to close in the second half of 2015 after approval from the holders of a majority of Ann Inc. shares
Shares of Ascena were up $1.14, or 8.02%, to $15.35 in early trading.
