Troubled fashion retailer, Noni B, is poised to be snapped up by a private investment group for $16.4 million.
Alceon Group has made an off-market takeover offer of 51 cents a share for the retailer.
Noni B says shareholders should accept the offer, which is priced at a 32 per cent premium to the 38.5 cents its shares were trading at on May 28 when it announced a major strategic review.
“Since announcing the strategic review in May 2014, the directors have given careful consideration to the way forward for Noni B and have concluded that the proposal from Alceon is in the best interests of the company,” chairman, Joycelyn Morton, said on Wednesday.
“The proposal maximises shareholder value and provides an opportunity for Noni B shareholders to realise a premium to the recent market price for their shares, notwithstanding the current market conditions and recent trading performance of the company.”
Members of the Kindl family, which founded Noni B in 1977, have agreed to grant an option to Alceon over the 19.9 per cent stake they have in the retailer.
Founder, Alan Kindl, said he was pleased the takeover offer would secure the retailer’s future.
“Furthermore, I strongly believe that under Alceon’s ownership, Noni B will see increased focus on its brand, product and retail presence and that the company will continue to serve its customers throughout Australia,” he said.
Alceon executive director, Richard Facioni, said he believed Noni B would have a profitable future and was confident in its long term prospects.
The takeover offer comes after Noni B last Friday announced a $7.8 million full year loss on the back of falling sales.
At the time, the retailer said a review of its future by major shareholders was close to a conclusion, although no sale of the business or other proposal was guaranteed to proceed.
Sales at the women’s fashion chain dropped 7.7 per cent in the year to June 30, to $112 million, contributing to an underlying loss of $2.2 million.
The company has been approached by several parties interested in taking a stake or complete control of it, after it announced its major shareholders, the Kindl family, were undertaking a strategic review.
Its shares were placed in a trading halt on Monday ahead of the takeover announcement.
The stock is due to resume trading at 1100 AEST.