The directors of fashion chain Bonmarche have asked its shareholders to “unanimously” reject a takeover bid by Spectre Holdings – an entity owned by retail entrepreneur Philip Day – as they feel the offer “materially undervalues” the retailer and its prospects.
On 2 April, Spectre Holdings announced it had unconditionally agreed to acquire 26,213,390 ordinary shares of 1 pence each in the capital of Bonmarche. The acquisition was completed on the same day, resulting in Spectre holding a 52.4% stake in the retailer.
Spectre then announced a mandatory cash offer to acquire the remaining shares in an unconditional offer. Details of the offer were set out to Bonmarche shareholders on 25 April.
Following the advice of Investec Bank, the retailer’s directors have issued a circular recommending the rejection of the offer.
The board added that it was reviewing a number of cost reduction actions which were set to be implemented and result in the “improved operational and financial performance” of the business.
It said: “Accordingly, the Bonmarche directors consider that, whilst being both immediate and certain, the cash value of the offer is unattractive when compared to the shareholder value that the Bonmarche directors aim to create in the medium term.
“Accordingly, the Bonmarche directors unanimously recommend that you should take no action in relation to the offer and that you should not sign any document which Spectre or its advisers send to you.”