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Big Moss Bros shareholder vents anger as suitor tries exit clause

Published
Apr 23, 2020
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A major Moss Bros shareholder has reacted angrily to the attempt by Brigadier Acquisition Company to get out of its agreed deal to buy Moss Bros due to the Covid-19 pandemic having materially changed its prospects.


Moss Bros



Cavendish Asset Management owns a 6% stake in the menswear retailer and fund manager Nick Burchett believes that Brigadier can’t back out at this stage. He said the coronavirus had already been declared a pandemic by the World Health Organization at the time the deal was struck. It was announced on March 12 when the UK was already social distancing but before its lockdown started.

Burchett also said it would be “disgraceful” if the buyer was allowed to walk away from the deal that would see Moss Bros being taken over for £22.6 million.

Cavendish has had more than its share of investments proving to be a disappointment having held stakes in both Bonmarché and Laura Ashley.

When the Moss Bros deal was announced a few weeks ago, Brigadier’s Menoshi ‘Michael’ Shina, (the owner of Crew Clothing) and the other entrepreneurs taking part said the retailer could have a “bright future in the private arena”.

Moss Bross is a stock exchange-listed company and on Wednesday it was revealed that Brigadier had appealed to the UK’s Takeover Panel to “lapse its offer”, basing this on a material adverse change (MAC) clause caused by the coronavirus.

It’s unclear whether it would succeed as the bar is set quite high to prove such as clause and the Takeover Panel has never agreed to a deal being cancelled on these terms. One ruling earlier this century had said that the fact that a proposed acquisition “will not be as advantageous for the offeror company as was hoped when the intention to offer was first announced, is one of the hazards which has to be accepted in a takeover situation”.

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