Shares of athletic apparel and footwear retailer Hibbett (NASDAQ: HIBB) surged 19.2% in the pre-market session following the announcement of JD Sports’ agreement to acquire all outstanding shares of the company for $87.50 per share in cash, representing an enterprise value of approximately $1.1 billion. The acquisition price represents a 21% premium to Hibbett’s April 22, 2024, closing price and a 29% premium to the 120-trading day volume weighted average price.
The acquisition news has significantly impacted the market’s perception of Hibbett, as indicated by the stock’s recent volatility. Historically, Hibbett has experienced 22 price movements greater than 5% over the past year. However, such significant moves are rare for the company.
Prior to the acquisition announcement, Hibbett’s stock experienced a 14.7% drop due to the company’s fourth-quarter results missing Wall Street estimates for same-store sales, revenue, and EPS. The company’s full-year EPS guidance also fell short of expectations, along with an underwhelming growth outlook.
Despite these challenges, Hibbett has seen a positive performance year-to-date, with a 20.6% increase in its stock value. Investors who purchased $1,000 worth of Hibbett’s shares five years ago would now have an investment worth $4,321.
