It's not that logical to be super-picky when one is in desperate straits. Struggling retailer Talbots
Talbots has agreed to let Sycamore take a peek into its books, which Sycamore requested last month in order to even consider a higher offer than it had in mind. The two entities have also penned a one-year "standstill agreement," which blocks Sycamore from taking certain actions without getting a prior OK from Talbots' management and board.
In December, I pointed out that Talbots' performance last year showed there's little hope for the struggling retailer; that hopelessness made it difficult to imagine exactly why Talbots' board considered Sycamore Partners' $3-per-share offer undervalued. (Incidentally, Sycamore owns about 9.4% of Talbots' shares already.)
It's hard to see how Talbots has any rationale for being hard-edged about interest from any buyer at this point. Not only has its financial performance been utterly disappointing, but the company's still looking for a replacement for CEO Trudy Sullivan, who was unable to turn around its fortunes for years on end.
On a bigger-picture level, the retail niche for Talbots is a difficult one, targeting the female baby boomer demographic. Coldwater Creek
Private equity involvement can often be very beneficial to a retailer. The loan that Golden Gate Capital has arranged with Pacific Sunwear
Rumors and innuendo aside, Talbots still looks like a terrible stock idea to me. Anybody who bought in at the stock's lows might luck out by doubling the pennies they plowed into this stock if Sycamore or some other firm acquires it. But that's the problem: At this point, too much has to do with whether this desperate retailer gets lucky or not, and that's no way to invest.
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Alyce Lomax does not own shares of any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.