Shares of the Columbus, Ohio-based company were up 21 percent at $16.45, after rising to as high as $16.75.
Sycamore, which has amassed a 9.9 percent stake in Express, said in a filing that it sent a letter to the company's board yesterday about possibly submitting a binding, fully financed proposal. Sycamore said it may seek discussions with Express's management and board and other stockholders.
“Given the strategic and operational challenges faced by specialty retailers generally and the company in particular, a fully financed, binding, all-cash offer to acquire the company would be a valuable alternative for the company’s board of directors and stockholders to consider,” Stefan Kaluzny, Sycamore’s managing director, said in the letter.
Express confirmed in a statement the receipt of the letter, and said it formed a special board committee to "determine a course of action it believes is in the best interest of all stockholders."
Express said it hired Perella Weinberg Partners LP and Sullivan & Cromwell LLP to advise the company and its new special committee.
The retailer, which is geared toward young adults, broke off from L Brands Inc. in 2007 and went public in 2010. The company sells work and casual clothing for customers in their 20s and 30s and operates more than 600 stores.
On May 29, Express lowered its earnings outlook for the year and said "second quarter results will be impacted by the need to move through slow selling spring inventory" and a Memorial Day event that wasn't as successful as last year.
Sycamore, which was started in 2011 by two executives from buyout firm Golden Gate Capital Corp., has been looking for opportunities in a retail economy battered by shaky consumer confidence and declining mall traffic. It previously acquired a stake in Aeropostale Inc. (NYSE:ARO) and extended a $150 million loan to the teen retailer.
Earlier this week, Sycamore announced it had acquired the Coldwater Creek brand and other intellectual property as part of that retailer’s Chapter 11 proceedings.