Investment firm closes offer for full Bon Marché takeover
Investment vehicle Spectre – which has been undertaking a hostile takeover of Wakefield-headquartered Bon Marché – has announced it will close its full offer because of the further decline in the retailer’s performance.
The Dubai-based firm, owned by billionaire Phillip Day, made a mandatory cash offer of £3m in April, purchasing 52% of the listed retailer. Under takeover rules, this meant that an offer for the full shares had to be made by Spectre and this was confirmed as being £2.73m – taking the total takeover acquisition cost to £5.73m.
However, Bon Marché at first rebuffed this offer because it said it was undervaluing the company. But Bon Marché yesterday announced it would now accept Spectre’s offer.
But Spectre has today (Thursday 27) said it is “now forced to close the offer” because “the passage of time, and a further decline in the performance of Bon Marché, has eroded Spectre’s ability to provide the advice, guidance and support needed to secure the long-term future of the Bon Marché business, its stores and employees.
Spectre needs to give 14 days notice before closing the offer. It will now close at 5pm. on 12 July.
The firm added: “Spectre is especially concerned by the suggestion that PwC, Bon Marché’s auditor, may shortly express uncertainty about the company’s ability to continue as a going concern in its FY19 accounts.
“Spectre has reviewed the announcement made by Bon Marché on 26 June 2019 giving the Bon Marché board’s updated guidance on the company’s trading performance and the board’s change in recommendation in relation to the Offer.”
Spectre said it had taken comments that trading for the company had been poor and that “there is a significant degree of uncertainty attached to the company achieving its financial targets.”
“Spectre further notes the Bonmarché board’s comments that the risks for the business going forward are heavily weighted towards the downside and that the current clothing market is not following the patterns of previous years,” it added.
“Since the announcement of the Offer, Spectre has believed that Bonmarché needs to reduce its cost base to a sustainable level and that a detailed review should be conducted of a number of elements of its business, including completing a store-by-store profitability assessment.
“Spectre believes the Bonmarché board’s latest trading update is a validation of Spectre’s view, expressed in the announcement of the Offer on 2 April 2019, that these reforms were needed urgently at that time.
“On 16 May 2019 Spectre further expressed concern that the Bon Marché board’s newly announced cost-cutting strategy was not sufficient to return Bon Marché to profitability.”
The investment firm concluded: “Against a background of negative trading updates and declining financial performance, Spectre is concerned Bon Marché may soon no longer have facilities available to it.
