12th Apr 2019 10:03
LONDON (Alliance News) - Women's fashion retailer Bonmarche Holdings PLC on Friday said the mandatory offer by Spectre Holdings, owned by Philip Day, "materially" undervalues the firm and its prospects.
The offer values Bonmarche at GBP5.7 million.
The mandatory offer came after Spectre, a Dubai-registered company 100% owned by Edinburgh Woollen Mill owner Philip Day, acquired 26.2 million shares, giving it a majority 52% stake in the retailer.
The offer, which is wholly unconditional, is priced at 11.445 pence per share, a 34% discount to Bonmarche's GBP8.7 million market value at Monday's close, the day before the offer was made.
Shares in Bonmarche were up 3.3% Friday at 15.50 pence each.
Bonmarche is engaging with Day over the company's future strategy in view of his position as majority shareholder.
Bonmarche added: "The board would also like to take this opportunity to inform shareholders that, in light of trading in the fourth quarter of the financial year, ended March 31, and prior to the announcement of the mandatory cash offer, it had been planning a number of cost reduction actions across the group and anticipates starting the implementation of these shortly. Further detail on these actions will be announced in due course."
The retailer "strongly advised" shareholders to take no action over the offer.
The final price to be paid by Spectre on full acceptance of the offer would be GBP2.7 million. It will be covered by a loan made to the company from owner Day on an interest-free, no fixed repayment term basis.
After buying the fashion retailer, Spectre would cancel its listing from the London Stock Exchange.
Spectre noted a recent streak of profit warnings and a significant decline in Bonmarche's profitability, including the latest warning of an annual pretax loss between GBP5.0 and GBP6.0 million, stating it believes it could offer advice, guidance and support.
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