Kathmandu hires Goldman Sachs to help assess Briscoe takeover, urges shareholders to wait

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 homewares and sports good retailer, yesterday offered 89.7 million of its own shares and $32.3 million cash for the 80.1 percent of the outdoor equipment and clothing chain it doesn’t already own. The proposal puts an enterprise value of $418.2 million on Kathmandu and amounts to a 2015 price-earnings multiple of 15.5 times.

The offer amounts to $1.80 per Kathmandu share, based on $2.88 per Briscoe share. Kathmandu shares fell 1.7 percent to $1.70, valuing the company at $342 million. Briscoe rose 1.8 percent to $2.85, giving it a market capitalisation of about $619 million.

The deal would create an Australasian retailer with annual sales of about $913 million and a market value of $847 million, according to presentation slides. Briscoe managing director Rod Duke’s holding of the enlarged group would shrink to 55.1 percent from about 80 percent of Briscoe, ensuring the retailing executive retains control. The combined group would have net debt of $96.8 million, compared to Briscoe’s debt-free balance sheet and net cash of $89.7 million in January.

(BusinessDesk)