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J. Jill Turns 18

Some ladies just won't take no for an answer. Liz Claiborne (NYSE: LIZ  ) has made an offer to snap up specialty retailer J. Jill (Nasdaq: JILL  ) at $18 a share, a 40% premium over last night's closing price.

It's not the first time that Liz Claiborne has made a play for J. Jill. Like Ashton Kutcher, J. Jill specializes in attracting affluent women over 35, although J. Jill merely aims to deck those women out in smart casual and workplace apparel.

The companies have negotiated before. In this morning's announcement, Liz Claiborne claims that the two specialty retailers have been in buyout talks over the past two years. Back in March, J. Jill rebuffed Liz Claiborne's offer to buy the company at $17 a stub.

Liz Claiborne isn't the only one to supposedly take a closer look at J. Jill. In August, it was rumored to be in the acquisitive sights of Urban Outfitters (Nasdaq: URBN  ) , but that deal never materialized publicly.

Liz Claiborne is doing the right thing here by making an unsolicited bid for J. Jill. With J. Jill's stock plunging below the teens, and the company appearing hardheaded at the helm, letting the court of public opinion decide J. Jill's fate works in Liz's favor. The stock shot up this morning, above and beyond the $18 offer.

J. Jill has been moving away from its higher-margin direct-mail catalog business and committing itself to growing at the mall level as a standalone apparel chain. These transitions pan out sometimes -- just consider companies like Sears and Coldwater Creek (Nasdaq: CWTR  ) . However, J. Jill had been struggling lately. Last month, the company posted disappointing quarterly results; it was forced to clear out inventory at unattractive prices to make room for its new arrivals.

The company's hard luck even made the stock a Halloween trick -- as opposed to a treat -- in our recent themed special feature. J. Jill is advising its shareholders not to act on the hostile takeover bid, but it will be hard to persuade them on that point. An $18 lifeboat from Liz Claiborne -- or the possibility of a slightly sweeter offer -- is far more tempting than watching the stock trade at $12 and change under current management.

Catering to the 35-and-older crowd is a lucrative niche, but it certainly feels crowded these days. It's not just J. Jill, Liz Claiborne, or Coldwater Creek, either. Chico's (NYSE: CHS  ) , Talbot's (NYSE: TLB  ) , and every single major department store chain has the same idea. Even Motley Fool Stock Advisor recommendation Gap (NYSE: GPS  ) has considered breaking into this niche.

If you were lucky enough to be holding shares of J. Jill, it's time to evaluate the relative upside and downside at the moment. The stock is trading for more than the $18 price tag this morning, and while Liz Claiborne -- or someone else -- may up the offer, J. Jill is in too big a fundamental funk to command much more than that.

Take the money and run, Jack. Let Jill come tumbling after.

Longtime Fool contributor Rick Munarriz loves shopping by catalog -- so long as he can find a parking space. He does not own shares in any of the companies mentioned in this story. The Foolhas a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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