Briscoe Group, the retailer controlled by managing director Rod Duke, has acquired 19.9 percent of Kathmandu and said it plans to make a full takeover offer for the outdoor equipment and clothing chain.
Auckland-based Briscoe said it picked up 4.99 percent of Kathmandu over time and has subsequently acquired 14.9 percent of the target from institutional investors for $1.80 a share. That amounts to about a 29 percent premium to Kathmandu’s closing price yesterday.
“I am excited by the potential that would arise from bringing together these two iconic retailers – we each have strong and recognisable brands that I see as complementary,” Duke said in a statement. The full takeover offer would consist of cash and shares.
Duke is making a move on the trans-Tasman retailer Kathmandu after a 44 percent slide in its stock price in the past 12 months. In February, Kathmandu said Christmas and January trading had lagged behind expectations, driving the retailer to a first-half loss. A month earlier, the company appointed Xavier Simonet to replace Peter Halkett, who left in November after eight years running the company.
Acting CEO Mark Todd said in March that the company, which has 157 outlets, was slowing its pace of new store openings and that its full-year performance was dependent on favourable Easter and Winter sales to restore margins that were squeezed by discounting over Christmas and January, particularly in Australia.
Briscoe said it wouldn’t comment further on its plans. The operator of the Briscoe homeware stores and Rebel Sports outlets was the subject of market speculation in January that it was looking at a bid for struggling childswear retailer Pumpkin Patch.
As at Jan. 25, Briscoe had $89.7 million of cash and bank balances available.
Briscoe shares rose 0.4 percent to $2.86 and Kathmandu shares jumped 28 percent to $1.78.