Crescendo Urges Aéropostale Board To Start Sale Process Immediately

(RTTNews) - Activist investment firm Crescendo Partners on Thursday urged the board of directors of teen apparel retailer Aéropostale, Inc. (ARO) to immediately start a broad sale process for the entire company to maximize shareholder value.

In a letter to the Aéropostale board, Crescendo said although Aéropostale has embarked on a turnaround to improve same-store sales trends and close underperforming stores, it believes those tasks are best accomplished as a private company.

Crescendo said it believes numerous potential buyers will be interested in acquiring Aéropostale because of its strong brand name and its compelling valuation.

Aéropostale could be sold for between $14 and $16 per share and a price in excess of that range may be achievable, given the strength of the company's brand, Crescendo said in the letter.

With the Aéropostale shares down 63% in the past three years, shareholders have suffered enough under the current Board and are entitled to a process that will maximize shareholder value, Crescendo noted in the letter.

Crescendo urged Aéropostale to set up a special committee of independent directors and hire investment bankers to conduct the sale process.

Crescendo also said it plans to nominate directors for the 2014 annual meeting to ensure that Aéropostale is taking the appropriate steps to maximize stockholder value.

Crescendo, together with its affiliates, is a significant shareholder of New York-based Aéropostale.

In September, private equity firm Sycamore Partners disclosed an about 8% ownership stake in Aéropostale.

Aéropostale shares are currently trading at $10.52, up 48 cents or 4.83%.