Allensford urges The Reject Shop to release trading performance
Allensford Pty Ltd has called for an urgent market update into the trading performance of The Reject Shop in an effort to ensure shareholders are fully informed when considering its takeover offer.
In order to give the company time to respond, Allensford has extended its on-market takeover offer until Tuesday, 22 January 2019, which will give The Reject Shop “plenty of time form a clear and complete picture of the first half of trading and informits shareholders accordingly.”
“Based on [The Reject Shop’s] recent sales performance, the business appears to be in serious decline,” Allensford Nick Perkins said.
“[The Reject Shop’s] Board are relying on a recovery in Christmas trading to justify the achievement of their current earnings guidance. Given this precarious position, [The Reject Shop] shareholders require an urgent update on the business’ trading performance – particularly if this guidance is in jeopardy.”
Perkins said that shareholders should be alarmed they are being asked to simply trust the business without having access to up-to-date sales information “given the recent performance of the business.”
The offer, which amounts to $2.70 per share and could equate to a $78 million takeover, was dismissed by The Reject Shop directors as “unsolicited and highly opportunistic” earlier in the month.
The Reject Shop chairman William Stevens said the offer undervalues the company’s shares and fails to account for future growth.
“The Reject Shop is conservatively geared and has remained profitable despite the continuing challenging retail environment and its investments in structuring the business for growth,” Stevens said in a letter to shareholders.
“[We have] already implemented a number of initiatives in laying the foundations for future growth and [continue] to see this growth as achievable.”
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