Bonmarché says Philip Day offer is too low

By

Sandra Halliday

Published
Apr 12, 2019

Philip Day may have bought control of Bonmarché but his attempt to buy the rest of the firm and take it private could be in jeopardy with the board saying on Friday that his 11.445p per share offer isn’t enough.

Billionaire retail entrepreneur Day already owns 52.4% of the struggling value retailer through his Spectre Holdings investment vehicle and UK rules mean the acquisition of that stake earlier this month made an offer for the rest of the firm a mandatory move.

But the board said that it “considers that the Mandatory Cash Offer materially undervalues Bonmarché and its future prospects.” Day’s offer had valued the entire firm at less than £6 million. The company’s shares had closed just below 15p on Thursday and rose Friday morning after the announcement, hitting 15.5p, presumably as investors thought Day might come back with a higher offer.

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The board statement added that “in light of trading in Q4 of the financial year ended 31 March 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.”

And there was a suggestion that the relationship between the current board and Day isn’t as good as it could be. The statement continued: “In view of Spectre's position as the majority shareholder in Bonmarché, the board has sought to engage with Philip Day to discuss the future plans for the business for the benefits of all stakeholders. The board continues to seek positive engagement with Philip Day and looks forward to discussions in due course.”

So what happens now? Bonmarché management is writing to shareholders with its formal response “once the offer document has been posted by Spectre. In the meantime, [its] shareholders are strongly advised to take no action in relation to their Bonmarché shares. Further announcements will be made as and when appropriate.”

On April 2, Spectre had said that it would conduct a thorough store-by-store review and that a number of stores would be closed “unless reduced rents, staff reductions or other cost saving measures can be successfully implemented.”