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Photo: John Greim/LightRocket via Getty Images

Women's apparel retailer Chico's FAS yesterday rejected a $3.50 per share takeover offer from private equity firm Sycamore Partners, saying it undervalued the company. Nothing shocking, given that Chico's had previously rejected an offer from Sycamore that was 18.6% higher.

Buzz: There are still some big questions about how Sycamore will fare on this non-deal, given that it disclosed a 6.6% stake in Chico's at the same time it announced its $3.50 per share takeover offer. And if that offer, which was bound to be nixed, was designed to recoup some earlier losses.

  • Outsiders are, by definition, not insiders. But that doesn't mean that they can't trade on information that will move a stock.

Before continuing, it's important to note that Sycamore doesn't like to talk to reporters about ... well, anything. And it's maintained that same posture this time around, made even more complicated by the fact that its outside PR firm happens to represent Chico's on this particular situation. So what follows is based only on public filings:

  • Sycamore reported on a Form 13D that it had invested $33.4 million to purchase the 7.64 million shares it held as of May 10 (when the revised offer was disclosed). That works out to an average of $4.37 per share.
  • But in an attached exhibit of detailed trading data, Sycamore only shows that it purchased a total of 5.07 million shares for $21 million ($4.14 per share avg), inclusive of 647,000 shares it subsequently sold for $2.57 million ($3.97 avg).
    • In other words, there's an unexplained discrepancy. It seems to work against Sycamore's favor but, if there are undisclosed purchases, perhaps there were also undisclosed sales.
  • Sycamore appeared to buy at market prices, with many of its outlays between April 25 and May 9 coming below the $3.50 per share offer it was about to make. And all purchases in that period were below where the stock spiked after the lowball offer was announced.

This missing math makes it very difficult to figure out Sycamore's performance or intentions, particularly when married to the fact that we have no disclosures (yet) about what Sycamore might have sold subsequent to its press release.

  • Yes, this is small money for a buyout firm investing out of a $4.75 billion fund. And Sycamore could have made a takeover offer without having first purchased any public equity.

The bottom line: In light of yesterday's discussion of the LTSE, it goes to show how lax public equity transparency rules can help big investors cut their losses.

Go deeper: Big-name private equity firms are asking for bigger cuts of investment profits

Go deeper

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The World Chess Championship between Norway's Magnus Carlsen and Russia's Ian Nepomniachtchi began on Friday, 1,094 days after Carlsen won his fourth consecutive title.

Why it matters: During the long, COVID-fueled layoff, chess entered a new era, and with the championship finally here, the age-old game is ready for its close-up.

Department of Interior proposes raising cost of drilling on public lands

A horizontal drilling rig and a pump jack sit on federal land in Lea County, New Mexico. Photo: Callaghan O'Hare/Bloomberg via Getty Images

Oil and gas companies should pay more to drill on federal lands and waters, the Department of the Interior argued in a report released Friday, saying that the current rates were "outdated."

Driving the news: The Department of Interior report said that the federal government's oil and gas leasing and permitting program "fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers."

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A COVID-19 vaccine is administered. Photo by Joe Raedle/Getty Images

The U.S. will impose new air travel restrictions in response to the Omicron variant, a new COVID strain first detected in South Africa, President Biden announced Friday.

The big picture: Air travel from South Africa, Botswana, Zimbabwe, Namibia, Lesotho, Eswatini, Mozambique and Malawi will be restricted starting on Monday.