Sycamore shows interest in American discounter Fred´s

Private equity firm Sycamore Partners is in talks with US-based regional discount store

operator Fred's Inc (FRED.O) about a potential takeover, according to people familiar with the matter.

As reported by Reuters on Friday, the alleged talks are at an early stage. Sources quoted by Reuters preferred to remain anonymous given the private nature of the reported deal.

Memphis-based Fred's, which has a market capitalisation of around 600 million dollars, said in January it had hired financial advisers Bank of America Corp (BAC.N) and Peter J. Solomon Co to explore strategic alternatives after weak holiday sales.

Shares of Fred's had fallen nearly 20 percent since the beginning of the year to jump over 10 percent on Thursday on news of the talks with Sycamore.

Founded in 1947, Fred's sells discount merchandise in 700 locations in southeastern United States and has Dollar General Corp (DG.N), Family Dollar Stores Inc (FDO.N) and Dollar Tree Inc (DLTR.O) as its main competitors.