Kathmandu has urged shareholders to take no action on a full takeover offer from Briscoe Group pending the board’s response, and has retained Goldman Sachs as an adviser.
Briscoe, the New Zealand homewares and sports good retailer, on Wednesday offered 89.7 million of its own shares and $NZ32.3 million ($A28.46 million) cash for the 80.1 per cent of the outdoor equipment and clothing chain it doesn’t already own.
The proposal puts an enterprise value of $NZ418.2 million on Kathmandu and amounts to a 2015 price-earnings multiple of 15.5 times.
The offer amounts to $NZ1.80 per Kathmandu share, based on $NZ2.88 per Briscoe share.
Kathmandu shares fell 1.7 per cent to $NZ1.70, valuing the company at $NZ342m.
Briscoe rose 1.8 per cent to $NZ2.85, giving it a market capitalisation of about $NZ619m.
The deal would create an Australasian retailer with annual sales of about $NZ913m and a market value of $NZ847m, according to presentation slides.
Briscoe MD Rod Duke’s holding of the enlarged group would shrink to 55.1 per cent from about 80 per cent of Briscoe, ensuring the retailing executive retains control.
The combined group would have net debt of $NZ96.8m, compared to Briscoe’s debt-free balance sheet and net cash of $NZ89.7m in January.