4th Aug 2008 07:00
Not for release, publication or distribution, in whole or in part, in, into or from the United States, Canada, Australia or Japan.
Beale plc ("Beale" or the "Company")
The Directors of Beale plc ("Directors" or the "Board") have noted this morning's announcement of a tender offer ("Tender Offer") by John East and Partners on behalf of Wenhedge Limited ("Wenhedge") to acquire up to 4,500,000 ordinary shares of 5p each in the Company ("Beale Shares").
The Directors do not intend to accept the Tender Offer in respect of their own shareholdings and believe shareholders should consider the following points when assessing what action to take in relation to the Tender Offer:
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1) |
The Tender Offer at a price of 36p represents a premium of 36 per cent. over the closing mid-market price of 26.50p per Beale Share on 31 July 2008, the day before the announcement of the Tender Offer. |
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2) |
The average closing mid-market price of a Beale Share over the last: |
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- 12 months was 45.98p |
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- 6 months was 35.87p |
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- 3 months was 30.54p |
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3) |
As at 3 May 2008 the Company had net assets of £21.25m equivalent to approximately 103.5p per Beale Share. |
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4) |
Wenhedge has given no indication of its future intentions in relation to Beale. If Wenhedge were to acquire all of the Beale Shares it is tendering for its shareholding would represent approximately 28.23 per cent. of the issued ordinary share capital of Beale. This level of shareholding would allow it to veto any special resolutions proposed by the Board. |
In addition the Directors would like to draw to the attention of shareholders the following highlights extracted from the statement of the Company's interim results to 3 May 2008 announced on 30 June 2008:
"Like for like gross sales declined by 6.4%, because of the continuing depressed retail environment. Gross sales for the period declined by 14.5%, reflecting the closure of the Ealing store at the end of October 2007.
Revenue for the period was £27 million (2007: £32.4 million including Ealing).
Substantial cost reductions achieved during the period with like for like costs £1.25 million lower than the comparative period. Total administration expenses for the period of £13.9 million reduced from £16.6 million (including Ealing).
Despite the fall in sales, Group profit before tax increased slightly to £881,000 (2007: £875,000).
Tight control of working capital has resulted in net debt of £5.3 million, unchanged from the comparative period end.
Tony Brown, previously retail director of British Home Stores, joined the Company as Chief Executive on 1 June 2008 bringing invaluable experience and energy to Beales.
Mike Killingley, Chairman, commented: 'The deterioration of the UK economy since this time last year has dramatically affected consumer confidence and it seems likely that the economy will remain depressed for some time. We have limited the impact of these difficulties by reducing our cost base substantially and we are continuing to examine costs critically to enable further savings to be made. A return to profitability, however, depends on reversing the decline in sales. Our senior management team, under Tony Brown, is developing its strategy to deliver such improvements, and we will report on this strategy and its implementation more fully at the time of the full year results.'"
Although it recognises that the Tender Offer price represents a premium to the market price of a Beale Share on 31 July 2008, the Board does not consider that the Tender Offer fully reflects the underlying value of the Company.
Therefore, the Directors do not intend to accept the Tender Offer in respect of their own shareholdings.
Shareholders who are in any doubt about the Tender Offer or what action to take are recommended to consult a person authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities before taking any action.
For further enquiries
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Beale plc Tony Brown, Chief Executive Ken Owst, Finance Director |
01202 552022 |
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Blue Oar Securities Plc Mike Coe |
0117 933 0020 |
The Board accepts responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Board (which has taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Blue Oar Securities Plc, which is authorised and regulated by the Financial Services Authority, is acting exclusively for Beale and for no-one else in connection with the matters described in this announcement and will not be responsible to anyone other than Beale for providing the protections afforded to customers of Blue Oar Securities Plc or for providing advice in relation to any matters referred to herein.
The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction.
Related Shares:
BAE.L