Allensford takeover offer closing in on The Reject Shop shareholders
The Reject Shop’s shareholders have one week to decide whether to accept Allensford’s on-market takeover bid, which will close on 5 March and will not be extended further, the bidding vehicle for the Geminder family said in a statement on Monday.
Allensford is offering to buy shares at $2.70 per share – shares were trading at $2.75 per share at the time of writing, but have constantly fluctuated between $2.70 and $2.80 per share since the beginning of 2019 – until 5 March.
Allensford extended its takeover offer earlier this month until after the discount department store revealed its half-year results, which it did last week. The Reject Shop announced an approximate 40 per cent decrease in net profit for the period to $10.6 million, in line with its prior guidance.
While Allensford director Nick Perkins said the results revealed deficiencies in The Reject Shop’s current strategy, and urged shareholders to approve the takeover offer on that basis, The Reject Shop chairman William J Stevens said Allensford’s speculation that the business could not meet its profit guidance has been proven to be incorrect.
“Allensford questioned the basis of the profit guidance and they questioned how The Reject Shop could maintain guidance in the face of November sales,” Stevens said.
“With guidance now met, and from the result of actual sales, Allensford’s speculation has proven to be unfounded.”
The Reject Shop board has firmly recommended its shareholders vote against the bid, which it believed doesn’t take into account the growth potential of the business.
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