Manchester online fashion retailer in £270m swoop

Online fashion giant Boohoo has acquired the remaining 34% stake in PrettyLittleThing in a deal worth up to £324m.

Shareholders Umar Kamani and Paul Papworth have received £269.8m – which includes £107.9m in shares with lock-up periods of 18 and 24 months.

They will receive a further 16.1m shares in the group, which would currently be worth £54m – if the group’s share price averages 491p over a six month period before March 2024.

Boohoo chief executive John Lyttle said: “It has been a brand that has delivered strong growth as part of the boohoo group’s platform, and has a great future ahead of it in the UK and overseas.

“I look forward to building on the great working relationship with Umar and the senior team at PLT as the group continues to move forwards with its multi-brand strategy as part of its vision to lead the fashion e-commerce market globally.”

Umar Kamani is the son of Boohoo’s executive chairman, Mahmud Kamani. The deal was negotiated by an independent board committee, which was supported by KPMG and Zeus Capital to ensure it was an arm’s-length transaction at fair value.

Umar Kamani, founder and chief executive of PrettyLittleThing, said: “This deal represents another milestone in our journey at PLT.

“The team and myself have big ambitions for the brand, and I’m incredibly excited about what the future holds for PLT as it embarks on the next stage of its global journey as a fully-owned part of the Boohoo group.”

The deal has immediately helped the fashion giant in its response to allegations from a London-based short seller.

Shadowfall, a hedge fund that specialises in taking positions against companies’ share prices, revealed on Tuesday it had bet on a share price fall in Boohoo.

It claimed that the company had exaggerated the amount of cash within its books in a 54-page report that was also critical of the relationship with PrettyLittleThing.

The report spooked investors, with Boohoo’s share price falling 12% on Tuesday afternoon.

Boohoo’s rebuttal statement, which said it “strongly refutes the allegations”, did little to help the share price. However news of the purchase of the remaining stake in PrettyLittleThing has seen it bounce back in early trading, recovering all of those losses.

A team at Zeus Capital comprising Nick Cowles, Andrew Jones, Josh Bean and Benjamin Robertson acted as nominated adviser and joint broker on the transaction.

TLT represented Boohoo as its legal adviser.

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