Equity firms to buy retailer Eddie Bauer

REDMOND, Wash. — Two private equity firms have agreed to buy apparel retailer Eddie Bauer Holdings Inc. for $286 million in cash, the clothing chain said Monday.

Under terms of the deal, a holding company owned by affiliates of Sun Capital Partners Inc. and Golden Gate Capital will pay $9.25 per share in cash and assume $328 million in debt.

The offer represents a nearly 5 percent premium over the $8.85 closing price of Eddie Bauer shares Friday and a 12 percent premium to the prior four weeks' average closing price.

The Redmond-based company said the acquisition is the result of a review of strategic alternatives begun in May 2006.

"We believe that the transaction will provide Eddie Bauer with new resources and the time necessary to execute our turnaround strategy," Chief Executive Fabian Mansson said in a statement.

The deal is subject to shareholder approval and is expected to close in the first quarter of 2007.

As of July 1, Eddie Bauer operated 267 retail stores and 108 outlet stores in the United States and Canada. During the quarter ended July 1, about 27 percent of its $225.7 million in sales came from catalog and online purchases.

Eddie Bauer shares rose 14 cents, or 1.58 percent, to close at $8.99 on the Nasdaq Stock Market, where the stock has ranged between $6 and $23.50 over the past year.