The Germinder family’s bid to take over struggling discount retailer The Reject Shop failed when it didn’t attract the requisite shareholder support on 5 March, though takeover vehicle Allensford has emerged with an 18.99 per cent voting power moving forward – up from the 7.1 per cent it held previously.
The change, priced at $2.70 per share, costed approximately $9.28 million and gives the business a total of 5.49 million shares.
Allensford had previously been dismissive of The Reject Shop’s recent first half trading results, calling them “dismal” and that the “terminal sales decline” was evidence of the board’s inability to right the ship.
The Reject Shop revealed a 40 per cent fall in net profit to $10.6 million, landing within the previously targeted guidance, due to the difficult trading environment it experienced during September, October and November.
“For TRS shareholders, this is yet another disappointing outcome, with the extremely poor outlook for the business providing little confidence that the Board’s current strategy can deliver a turnaround,” Allensford director Nick Perkins said in a note to TRS shareholders.
Perkins went on to state that the continued sales deterioration over the period was confirmation that the long-term underperformance of the business was set to continue.
The Reject Shop set the business’ full year net profit guidance at between $3.1 million and $4.1 million, after an expected net loss of $6.5 million and $7.5 million.
Allensford didn’t wish to comment on the matter. The Reject Shop has been contacted, and this story will be updated when it responds.
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