HINGHAM — Talbots Inc., which posted the worst returns of any US retailer in the past decade, is now offering some of the biggest potential gains for traders willing to bet a deal with Sycamore Partners LP will finally close.
With the Hingham-based women’s apparel chain trading about 7 percent below Sycamore’s takeover bid of $2.75 a share, investors buying the stock today could post a 61 percent profit, on an annualized basis, if the acquisition is completed by the end of August. That would be the largest return for any pending all-cash deal in the United States of more than $100 million, according to data compiled by Bloomberg.
While MKM Partners says concern about pension liabilities and the parties’ track record of rejected and renegotiated deal prices earlier this year have made some traders wary of betting on the takeover, short sellers have cut bearish bets by more than half since the end of May.
Even as Sycamore’s tender offer expires this week, Tullett Prebon PLC and T2 Partners LLC say the private-equity firm is a motivated buyer and will get the acquisition done within a month. Completion would finally give traders a chance to make money; the retailer has lost more than 90 percent of its market value in the past 10 years.
Representatives of both Talbots and Sycamore had no comment.
Talbots saw sales shrink to $1.14 billion in the year ended Jan. 28, down from a peak of $2.23 billion five years earlier.