Apollo Management has agreed to buy Claire's Stores (OTC: CLEKA) for $3.1 billion, a premium of 7.3% over its pre-deal closing price. In December, Claire's hired Goldman Sachs Group (NYSE: GS) to help find a buyer. The deal is well below the stock's 52-week high, and is right around the price the shares were trading at prior to the hiring of Goldman. While Goldman's bankers probably extracted nice fees, it doesn't look like Claire's shareholders really benefited from the deal.
So what does Apollo get? A well-run business with 3,000 stores, no debt, $245 million in cash, and cash flow of a few hundred million dollars. The business is run efficiently enough that it's unlikely Apollo will be able to shake things up and flip it in a few years, but the company generates enough cash that it's probably worth holding on to.
It doesn't look like such a great deal for Claire's shareholders, but Apollo should be happy.
