Ann: Response to Media Speculation, page-2

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Street Talk - City Chic M&A hunt puts spotlight on Lane BryantSarah Thompson, Anthony Macdonald and Tim BoydJul 6, 2020 – 9.35pmSaveShareIt turns out City Chic investors like the idea of a plus-sized company.After City Chic confirmed Street Talk's report that it was keen to bolster its portfolio and was considering its funding options, the shares finished up 5.5 per cent on Monday.City Chic's acquisition hunt is focused on the United States. Now we have news of an expected target.Dealmakers reckon the most logical target is 100-plus-year-old American speciality retailer Lane Bryant.Lane Bryant is a retailer specialising in plus-sized women's clothes and has about 720 retail and outlet stores and direct channel operations spread across much of the UnitedStates.

The company targets shops in suburban and small towns and its pitch is "fashionable and sophisticated apparel at a moderate price point to female customers in plus-sizes 14-28" via its own labels and a few national brands.Lane Bryant is owned by Nasdaq-listed Ascena Retail Group, which, according to reports out of US, was considering filing for bankruptcy last month.Investors reckon it's the sort of acquisition that could fit the bill for City Chic. It's on strategy, from a distressed seller, would help expand the group's global footprint and would be in line with a similar purchase late last year.The question fund managers and analysts have, though, is whether City Chic would be interested in the bricks and mortar network or just the online platform. When it acquired American retailer Avenue from bankruptcy last year, it purchased just the e-commerce assets.The other question is which investment bank would be on hand to take care of any associated equity raising.While fundies know small cap specialists Canaccord Genuity and Wilsons and Wall Street bigwig Goldman Sachs are tight with City Chic, it is understood there could be a surprise with Morgan Stanley helping the company.Sources said there's a bit of water to go under the bridge before that happens. But there have clearly been worse times for the market darling to pursue a deal.