Bain Capital to take Gymboree private for $1.8 billion

Shares of the San Francisco-based retailer were up 23 percent at $64.97 in morning trade Monday. Rival Children's Place Retail Stores Inc rose 5 percent to a year high, while Carter's Inc rose 3 percent.

Under the deal, Gymboree shareholders will get $65.40 in cash for each share held, a premium of 23.5 percent to the stock's closing on Friday. The offer is at a 57 percent premium to the stock's price before reports on a possible sale of the company made the rounds on September 30.

On October 5, sources said the company had hired Goldman Sachs to begin a formal auction.

Gymboree, which runs retail stores and play centers, said it will solicit acquisition proposals from third parties for a period of 40 days.

Gymboree owns the Gymboree, Gymboree Outlet, Janie and Jack, and Crazy 8 brands. As of October 2, it operated a total of 1,037 retail stores, including in Canada, Puerto Rico and Australia.

Goldman Sachs is acting as financial advisor to the special committee of the board.

Under the terms of the deal, it is expected that affiliates of Bain Capital will start a tender offer for all of the outstanding shares of Gymboree shortly following the execution of the agreement.

Gymboree shares were trading close to the buyout offer at $64.99 in morning trade on Nasdaq. They touched a high of $65.18 in early trade.

(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)

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