Shares in French Connection (FCCN) charged 72.5% higher to 27p on Friday as the hard-pressed fashion retailer confirmed it is in takeover talks with Spotlight Brands and Go Global concerning possible takeover offers, although discussions with both potential acquirers ‘remain at a very early stage’.
Retail sector watchers will be surprised to see the bidders don’t include Mike Ashley’s Frasers (FRAS), the Sports Direct-to-House of Fraser owner with a 25% stake in French Connection.
NOT ONE, BUT TWO BIDS
This morning, embattled French Connection reacted to yesterday’s 40% spike in its share price by announcing it has received not one, but two approaches from a pair of new US scavenger funds, namely Spotlight Brands and Go Global.
‘Discussions with both Spotlight and Go Global remain at a very early stage,’ explained French Connection. ‘Accordingly, there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made (although any offer is likely to be in cash). Further announcements will be made as appropriate in due course.’
WHERE’S MIKE?
The absence of mercurial Mike Ashley from the bidding is fairly surprising, since the Newcastle United Football Club owner has just missed out on the carve ups of both Debenhams and Arcadia and his Frasers retail empire counts French Connection among its numerous strategic investments.
Steered by veteran founder Stephen Marks, who acts as both chairman and chief executive, struggling French Connection’s brick and mortar outlets have been hard-hit by Covid lockdowns, although the e-commerce business has fared better.
In January of 2020, before the onset of the coronavirus pandemic, French Connection actually abandoned plans to sell the business and decided instead to focus on an unlikely turnaround.
