Gap Rumored to Be Possible Japanese Buyout Target

by Christopher Freeburn | February 21, 2013 10:37 am

The Gap 2 300x199 Gap Rumored to Be Possible Japanese Buyout Target[1]Last week, rumors circulated among investors that Japan’s Fast Retailing (PINK:FRCOY[2]) might be considering a buyout[3] of Gap (NYSE:GPS[4]).

The possibility of a takeover comes after Gap’s turnaround appears to be taking root. The company’s shares have climbed 77% since the beginning of 2012, the Motley Fool noted.

Fast runs Uniqlo, a major worldwide apparel retail chain that has only five stores in the U.S. The company has stated that it is looking to acquire brands that have “the potential to develop globally.” Last year, Gap generated $934 million in overseas sales.

A merger between the two retailers would allow Gap to leverage Uniqlo’s international supply chain, while giving the Japanese chain a significant presence in the U.S. market.

Gap has a market value of about $16 billion, while Fast’s market capitalization is north of $20 billion.

In January, Gap announced that it would purchase women’s luxury apparel retailer[5] Intermix for $130 million.

Shares of Gap fell more than 1% in Thursday morning trading, while Fast Retailing shares slipped almost 2% in over-the-counter trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/05/The-Gap-2.jpg
  2. FRCOY: http://studio-5.financialcontent.com/investplace/quote?Symbol=FRCOY
  3. might be considering a buyout: http://www.fool.com/investing/general/2013/02/19/gap-and-fast-rumored-to-talk-merger.aspx
  4. GPS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GPS
  5. would purchase women’s luxury apparel retailer: http://investorplace.com/2013/01/gap-to-buy-luxury-fashion-retailer/

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