Stifel: Chicos Acquisition Could Be Worth $3.2 Billion

Shares of Chicos (NYSE: CHS) are up more than eight percent after the Financial Times reported that the company may be looking to be acquired by a private equity firm.

Stifel analyst Richard Jaffe commented that a deal of this nature could be beneficial for Chicos shareholders. According to Jaffe, recent deals have seen LTM EBITDA in the range of eight to 10 times. These multiples would put a deal in the range of $2.53 billion to $3.18 billion; the current market capitalization is $2.36 billion.

Jaffe went on to comment that Chicos is a good candidate for a private equity takeover because the company has had weak results and only modest growth prospects. Stifel currently has a Hold rating on Chicos.

Shares were last trading at $16.68. Despite Tuesday’s boost, shares are down more than 11 percent year-to-date.