Briscoe Group will launch a takeover offer for struggling Kathmandu after building a 19.9% stake off market.
Milford Asset Management analyst Victoria Harris talks about the Briscoes takeover of Kathmandu on NBR Radio and on demand via MyNBR Radio.
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See also: Hostile bid puts new Kathmandu boss in the hot seat and Kathmandu shares soar on prospect of Rod Duke transferring some of his Briscoe 'magic'
Briscoe Group [NZX: BGR] says it has bought a near 20% stake in struggling travel and adventure equipment company Kathmandu [NZX: KMD] and will launch a takeover offer shortly.
In a notice to the NZX, Briscoe says it now has a 19.9% shareholding in Kathmandu – after 4.99% was acquired over time and the remaining 14.91% acquired from institutional shareholders at $1.80 a share.
This is above its current share price of $1.39, which has fallen 54% in the past year.
Briscoe says it will lodge a takeover offer including cash and scrip to all Kathmandu shareholders, although it is not yet known what the offer price will be.
A $1.80-a-share offer price would value Kathmandu's equity at $363 million.
Kathmandu’s share price slumped in January when it announced a weak outlook for the year ahead, and after it posted a loss of $1.8 million in the six months to January 31, down from a profit of $11.4 million a year earlier.
At the time, there was speculation over who would launch a takeover bid.
Kathmandu has struggled in the past 18 months after unseasonal weather conditions at its peak sale times forced it to discount heavily to get rid of excess stock.
Briscoe managing director and majority shareholder Rod Duke says in a statement there is potential benefit from bringing together the two iconic retailers. “We each have strong and recognisable brands that I see as complementary.”
When contacted by NBR ONLINE, Mr Duke would not comment further on the takeover bid, saying he had been advised by his legal team that to do so "would not be very clever at this point."
As at January 25, Briscoe had $89.7 million of cash and bank balances available.
Kathmandu also released a statement to the NZX to acknowledge Briscoes’ announcement, but says it “has had no contact with Briscoes and will not make further comment about the imminent takeover offer at this stage.”
Briscoe shares rose 0.4% to $2.86 and Kathmandu shares jumped 28% to $1.78.
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