Bonmarche today hit back at a cut-price takeover bid from entrepreneur Philip Day, saying it “materially undervalues” the struggling retailer’s future prospects.
The French-themed fashion chain urged shareholders to take no action on the 11.445p-per-share offer from Day’s Dubai-registered Spectre Group.
The Edinburgh Woollen Mill owner already owns a majority stake in Bonmarche and hopes to take the firm private in a £5.7m deal.
However, Bonmarche’s board said today that it “considers that the Mandatory Cash Offer materially undervalues Bonmarche and its future prospects”.
“The board has sought to engage with Philip Day to discuss the future plans for the business for the benefits of all stakeholders,” it added.
“The board continues to seek positive engagement with Philip Day and looks forward to discussions in due course.”
Day swept in with his offer after the high street trader issued its third profit warning since September in March, telling investors to expect up to a £6m loss this year.
But the 52.4 per cent stakeholder’s takeover bid sent shares crashing as he revealed he wanted to buy up remaining investors’ stakes for just 11.445p per share.
His revamp plan would see redundancies among Bonmarche’s 1,900 staff as well as a string of store closures as he conducts store profitability assessments.
Today Bonmarche told investors it has its own cost-cutting proposals in the works, “planning a number of cost reduction actions across the group and anticipates starting the implementation of these shortly”.
In the meantime the board urged them to resist Day’s overtures.
“Bonmarche shareholders are strongly advised to take no action in relation to their Bonmarche shares,” it said. “Further announcements will be made as and when appropriate.”
Shares closed at 15p yesterday, compared to their July 2018 value of 122.5p.