Rue21 catches buyout firms' attention

The American tank tops and graphic tees retailer has arisen

a great deal of expectation among investors, been penned as the next target after private-equity investments in retail within the US.

Analysts at Piper Jaffray Cos. said private-equity firms could be tempted to offer as much as a 50 percent premium for the retailer.

“For private equity, it’s attractive,” Amy Hu Sunderland, a Hong Kong-based analyst at Grandeur Peak Global Advisors LLC, which owns shares of Rue21, said in a telephone interview with Bloomberg.

“They have very strong economics when it comes to their business and their financial model. It generates very strong free cash flows, which private equity tend to like,” Sunderland added. Rue21 is projected to more than triple its free cash flow this year, according to data compiled by Bloomberg.

The company's market value is of 739 million dollars.