Michaels Companies soars 22% after Apollo agrees to buy the crafts retailer for $3.3 billion

• The Michaels Companies soared 22% on Wednesday after Apollo agreed to buy the arts and crafts retailer for $3.3 billion.
• Apollo will launch a tender offer to acquire all outstanding shares of Michaels for $22.00 per share in cash.
• As part of the deal, Michaels has a 25-day go shop period to see if it can get a higher bid from other interested buyers.
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The Michaels Companies soared 22% on Wednesday after funds managed by Apollo Global Management agreed to acquire the arts and crafts retailer for $3.3 billion.

Apollo will launch a tender offer to acquire all outstanding shares of Michaels for $22.00 per share in cash following a 25-day go shop period, in which Michaels could solicit offers from other potentially interested buyers.

Michaels is the largest retailer of arts and crafts supplies in North America. Michaels' stock has soared 2,100% since it hit $1.00 per share amid the COVID-19 pandemic last year.

The proposed deal assigns an equity value to Michaels of $3.3 billion, but the total transaction is worth $5.0 billion when including the debt Apollo will assume with the takeover.

Shares of Michaels traded slightly above the offer price, with a high of $22.30 on Wednesday following the announced deal, suggesting that investors believe another bidder could potentially come in to offer the retailer a better deal.

"The Company's impressive growth transformation, including our financial and operational performance in the unprecedented environment of the pandemic, led to an unsolicited offer to buy the company," said James Quella, Chairman of the Michaels Board of Directors.

The deal has been approved by the board of directors of Michaels.