Interests controlled by veteran retailer Brett Blundy have made a takeover bid for discount fashion retail Best & Less – at a price lower than the company’s shares have been trading during the past quarter.
Blundy, who is a non-executive director of the business, already controls a 16.45 per cent stake in Best & Less and his bid is backed by Ray Itaoui, who owns the online music retailer Sanity.
Two cornerstone shareholders in Best & Less have advised the board they intend to accept the offer, effectively handing control to Blundy and Itaoui. They are investment group Allegro, which holds 32.43 per cent and the Bignor Family Ltd, a company associated with Best & Less’ chairman Jason Murray which has 8.27 per cent. Murray has been serving as acting CEO of Best & Less since September after former CEO Rodney Orrock stepped down from the role in February last year to recover from cancer. Last month Murray announced Erica Berchtold of The Iconic would become CEO on September 4 and her appointment has been reconfirmed by the bidders.
Blundy’s BBRC International, trustee for the BB Family International Trust, and Itaoui are making an off-market cash offer of $1.89 per share, which is below the closing price of $1.985 on Friday and more than four cents below the volume weighted average price of $1.934 over the three months to last Friday. Given the offer is conditional on reaching a 55 per cent stake in the business, control has been reached, however, the bidders are hoping to seal a complete takeover and minor shareholders now have the option of selling.
Best & Less’ board has formed an independent committee to evaluate and respond to the takeover bid.
Lead independent director Stephen Heath said in a statement that while the offer does not contain a ‘typical control premium’, the committee determined the offer should be made available to all shareholders leaving individuals to make their own decision whether to accept.
“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. That being said, we note that the offer will provide an ability for shareholders who wish to exit large shareholdings in [the group] to do so in an orderly fashion without unduly impacting the company’s share price.
“Similarly, the minimum acceptance condition also provides a real opportunity for all remaining shareholders who wish to remain invested in the company to do so in an entity that – should control pass under the takeover offer – is ultimately controlled by Brett Blundy, an individual with a strong track record of delivering value in the retail sector.”
Best & Less operates online and through a network of 248 stores, its New Zealand arm trading as Postie. It targets mums and families buying baby and kids’ “value apparel”.
