Bonmarché board criticised by firm lining up its takeover

20 May 2019

Bonmarché board criticised by firm lining up its takeover

The company eyeing a takeover of Bonmarché has hit out at the listed womenswear fashion chain's board, saying it does not believe the company's plans and strategy will yield shareholder value.

In April, Spectre Holdings acquired about 26.2 million shares in Bonmarché Holdings from BM Holdings at a price of 11.445 pence per share, taking its interest in the group to 52.4 per cent.

Under Rule 9 of the Takeover Code, it was then required to make a mandatory cash offer for the remaining shares at the same price. This values the entire issued share capital of Bonmarché at about £5.7m.

Details of the offer were sent to Bonmarché shareholders on 25 April, with the board saying the proposed deal "materially undervalues Bonmarché and its prospects". Directors urged shareholders to reject it.

Spectre has now reviewed this circular. It confirmed plans to keep the offer to Bonmarche shareholders open until further notice but added that it will now "take a step back and see if the Bonmarché board can deliver on the plans and strategy it has set out".

"At this point in time, Spectre does not believe these plans will deliver value for Bonmarché shareholders in the medium term," it said.

"Spectre notes the cost-saving strategy set out by the Bonmarché board, which conveniently followed Spectre's views in the offer document and announcement of the offer. Spectre will monitor this carefully and the performance of the Bonmarché business.

"Unfortunately, Spectre does not believe the cost saving plan announced by the Bonmarché board will be sufficient to return Bonmarché to profitability.

"Spectre believes the Bonmarché board now needs to demonstrate what they are doing is working and they are delivering on their plans. Spectre will continue to monitor the progress being made and the overall performance of Bonmarché."

Spectre is a Dubai-registered entity incorporated in March 2017 and is 100 per cent owned by Philip Day, the founder and owner of The Edinburgh Woollen Mill Group.