Australian clothing, accessories and household linens retailer Best & Less [ASX:BST] has received an off-the-market cash takeover proposal from private investment firm BBRC International.
The proposal values Best & Less, also known as BLG, at $1.89 a share, and it’s conditional on generating at least 55% in shareholder approval.
BBRC is a firm founded by Australian entrepreneur Brett Blundy and has a 40-year running success rate of investing, creating, and growing businesses.
BST had dropped by 3% in value at the offer announcement and was priced at $1.92 a share in the early afternoon.
In the year, BST has plummeted nearly 40% in share price, and 39% compared with XJO, the S&P 200:
Source: TradingView
Best & Less’ proposal up to the shareholders
Retailer of fabrics, clothing, and accessories, Best & Less (or BLG) has shared a cash off-market takeover offer from Brett Blundy’s BBRC International at $1.89 each BST share.
If successful, the transaction will close the ownership gap of the Aussie apparel franchise with BBRC already owning 16.45% of the BLG shares on issue.
Blundy has teamed up with business partner Ray Itaoui to make the takeover offer, the owner of iRetail, a group which encompasses the Sanity retail chain. Co-owned by Blundy’s BBRC, Sanity boasts 80 stores across Australia in the ongoing challenging retail environment.
The offer BBRC has made to BLG is conditional on receiving at least 55% in acceptance, which includes BBRC’s stake. It’s also subject to there being no material adverse changes and no legal or regulatory obstacles that may compromise things.
BBRC and Itaoui have advised that the cash offer of $1.89 per BLG share would be reduced by any dividend or other distribution that might be paid after the announcement of this offer.
The offer price compares to a closing price of $1.985 per BLG share on 28 April 2023, and a volume weighted average price of $1.934 per share in the three-month period ended 28 April 2023.
BLG’s board has discussed the takeover terms with major shareholders, Allegro Fund and Allegro Services, which together hold around 32.43% of BLG’s shares on issues. This includes the Bignor Family, which also holds about 8.27% of the issued BLG shares, resulting in a collective intention to accept the offer subject to there being no superior proposal.
BLG shareholders were advised not to take any action in connection with the offer prior to an offer receipt from the bidder and a target statement from BLG.
Lead independent director Stephen Heath stated:
‘We received a non-binding proposal from a major shareholder to increase its holding in BLG. While the offer does not contain a ‘typical control premium’, we have received statements from both Allegro and Bignor that they each intend to accept the offer in the absence of superior proposal.
‘Accordingly, the IBC has determined that the Takeover Offer should be made available to all shareholders recognising that the decision as to whether to accept the offer or not will be based on individual shareholder preferences. We will carefully consider the proposal and provide a formal recommendation in our target’s statement, and we will also commission an independent expert’s report.’
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For Money Morning
