Tycoon launches aggressive takeover bid of retail chain Bonmarché

The British billionaire businessman Philip Day has put forward a bid to buy the struggling fashion chain Bonmarché at just 11.445p a share, pricing the company at less than £5.7 million.

Earlier this month, it was announced that the Edinburgh Woollen Mill Group owner would purchase a 52.4 per cent stake in the retail chain from private equity backer Sun Capital, triggering a mandatory takeover bid and giving full control of the company to Mr Day.

Shares in Bonmarché – a ladies wear brand which launched in Yorkshire in 1982 – fell further on the announcement of the bid, dropping some 17 per cent.

Responding to the bid, the Bonmarché board said it was “considering the terms” of the offer, but warned that the takeover could put jobs and stores at risk.

According to the Dubai-based acquisition vehicle Spectre, owned by Mr Day, the takeover may result in cost savings through closing unprofitable stores, reducing the size of its head office, reviewing staffing at its distribution centre, reducing ranges and renegotiating supplier terms.

The Bonmarché group has approximately 380 stores nationwide and employs more than 4,000 people, but has in recent years posted a number of negative trading updates, including an announcement on 19 March estimating an underlying pre-tax profit for the year to range from breakeven to a £4 million loss.

Commenting on the takeover bid, Spectre said in a statement to the stock market: “Against the backdrop of the significant decline in Bonmarché’s profitability, Spectre believes it is well positioned to provide advice, guidance and support to secure the long-term future of the Bonmarché business, its stores and employees. The owner of Spectre, Philip Day, has a successful track record within the retail sector, especially in turnaround and distressed situations.”

Nigel Fry, Partner at Milsted Langdon, said: “Bonmarché hangs in the balance. It must now choose whether to risk precious jobs and take up Mr Day on his offer, or look elsewhere. The latter, of course, leads to a road of uncertainty about the company’s future.”

Milsted Langdon can advise you through all aspects of Mergers & Acquisitions. For more information about how Milsted Langdon can help, please contact Nigel at nfry@milstedlangdon.co.uk or by calling 01823 445 566.

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