N Brown Group PLC on Thursday said it has agreed to be taken over by a vehicle controlled by Non-Executive Director Joshua Alliance, a member of the firm’s founding family.
Falcon 24 Topco Ltd will pay 40 pence in cash per N Brown share, valuing the Jacamo and Simply Be owner at £191 million. The price per share represents a 48% premium to Wednesday’s closing price of 27p.
N Brown considers the bid to be ‘fair and reasonable’.
Shares in the Manchester-based retailer surged 43% to 38.52p on Thursday afternoon in London. It has a market capitalisation of £180.4 million.
Non-Executive Alliance already owns 6.6% of N Brown. In addition, members of the Alliance Family concert party own just over 53%.
The firm’s bidder took a parting shot at the AIM market, the junior segment of the London Stock Exchange where N Brown is listed.
‘Bidco believes that, in light of N Brown’s current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefitting from being listed on the AIM market, whilst having to bear significant costs associated with its listing,’ it said.
‘Furthermore, Bidco believes that the acquisition presents an opportunity to acquire a portfolio of well-established fashion brands, supported by an innovative financial services platform that is currently under development, with a long history and heritage in the UK clothing and footwear market.’
The acquisition is expected to be completed in the first-quarter of 2025.
Non-Executive Alliance said: ‘My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business. I am delighted to continue that history.
‘This transaction will support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business. In the business’ current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets.’
The takeover has the support of just under 71% of N Brown shareholders. Of those eligible to vote in a court meeting for the deal, which excludes Joshua Alliance, the takeover has the support of just over 78%.
Sports Direct owner Frasers Group PLC, with just over a 20% stake in N Brown, has backed the deal.
Copyright 2024 Alliance News Ltd. All Rights Reserved.
