Activist investor targets ARO

Article Excerpt

AEROPOSTALE $8.99 (New York symbol ARO; TSINetwork Rating: Extra Risk) (646- 485-5410; www.aeropostale.com; Shares outstanding: 78.5 million; Market cap: $705.6 million; No dividends paid) is now 8% owned by New-York based private equity firm Sycamore Partners. Earlier this year, Sycamore Partners paid $600 million for Hot Topic, a U.S. teen retailer with over 800 mall-based stores; in early 2012, it bought Talbots, a struggling women’s wear chain, for about $400 million. It’s far from certain that Sycamore Partners will buy Aeropostale, and the firm has a reputation for not paying a big premium above current market prices. However, Sycamore’s involvement does highlight Aeropostale’s underlying value and turnaround potential. Aeropostale is still a hold. hold…