MySale board changes its mind and recommends Frasers bid
Frasers Group may have been struggling to get MySale shareholders to accept its bid for the company, but that could change now with the latter's board deciding to recommend the offer.
The board said its “updated recommendation” is that shareholders take the 2p a share that’s on the table.
It seems that the board is facing the inevitable rather than suggesting that 2p each is a good offer. It said in a stock exchange announcement that it “continues to unanimously believe that the offer undervalues the company and its future prospects”.
But it recognises that Frasers already has a huge holding in the firm with its stake adding up to almost half of the issued shares.
The statement continued: “At this level of ownership, the board believes that Frasers will be able to exercise significant control over the company such as being able to pass and/or block resolutions (as applicable) at any general meeting, including, amongst others, the appointment or removal of directors and disapplication of pre-emption rights with respect to MySale shares.
“As such, the board believes that Frasers's shareholding of 48.48% of the voting rights in the company represents effective control, the impact of which could be to change the strategy and capital structure of the company on a standalone basis.”
It also admitted that the offer would reduce the liquidity of the shares so it would be "very difficult for a MySale shareholder who does not accept the offer to sell and monetise their shareholding in a reasonable timeframe without having a material impact on the price.”
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