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Briscoe silent on Pumpkin Patch

pumpkin_patchRod Duke, majority shareholder and MD of Briscoe Group, has refused comment on market speculation that he may take control of struggling children’s clothing retailer Pumpkin Patch.

Pumpkin Patch hired Goldman Sachs in late 2014 to advise on its capital and funding requirements and said a share issue was an option after warning it could breach banking covenants if Christmas trading fell below expectation.

Duke owns about 10 per cent of the clothing chain, is a non independent director, and claims to be down around $NZ20 million ($A18.62 million) on his original investment so far.

Market speculation centres on him underwriting a non renounceable rights issue which would mean he could potentially take up shares that are not taken up by others.

Under market regulations he would be required to make a takeover bid or gain shareholder approval if his stake lifted above 20 per cent.

Duke, who owns around 80 per cent of Briscoe, said: “If I start commenting on this speculation I’ll be expected to keep doing so in future”.

Asked why he’d bought into Pumpkin Patch, he said it was a decision he’d made some years ago because it looked good value and was a good concept.

“I had a six year old boy at the time who liked wearing their clothes which just goes to show you should never get into something because of children or animals,” he said.

“It’s a very sad story.”

Briscoe had cash of $NZ60.2 million at the end of July and, he said, it could potentially borrow a further $NZ200 million to $NZ300 million.

He said the group had been looking at various acquisitions for the past two to three years but hadn’t yet found anything that either met his criteria or was up for sale.

That criteria includes something that is earnings accretive, fits with the existing portfolio which includes Briscoe, Rebel Sports, and Living & Giving, and plays to the group’s core competencies.

“I’m looking for something grunty, not a little business that would grow into another little business,” he said.

Pumpkin Patch’s share price has dropped 67 per cent in the past year to trade at 24 NZ cents on Friday, well under the $NZ1.50 Duke said he paid in one of the two tranches he bought.


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