French Connection reveals 30p-a-share takeover approach
Under-pressure fashion retailer French Connection said on Wednesday that it had received a takeover approach as part of the formal sale process it kicked off back in March.
Its stock exchange release came as its share price jumped more than 20% in morning trading on bid speculation and was in direct response to that leap.
The firm said it has “received an approach from a consortium of bidders including the company's second largest shareholder Apinder Singh Ghura, Amarjit Singh Grewal and KJR Brothers Limited”.
They’re potentially offering 30p per share in cash, although whether other investors think it will result in a deal is open to question as the share price had only risen to just under 27p each by late morning, giving it a market valuation of less than £26 million.
Discussions with the consortium “remain ongoing” and French Connection stressed that there’s no certainty of a deal.
The retailer has seen a number of bleak years that led to it closing stores and putting itself up for sale. Once on a high with its FCUK logo seen everywhere, it has since seen years of falling sales and losses with investors growing increasingly frustrated.
At the start of March this year, French Connection said it was mulling a sale and was looking for potential suitors . That came as Spotlight Brands with Gordon Brothers, and Go Global Retail in partnership with HMJ International had backed out from making an offer to buy it, even though the investment firms had approached it.
At the time, Frasers Group took advantage of the rising share price to sell its almost-25% in the firm (although it also missed out on a further price rise).
But even if a buyout goes through at 30p, it’s a far cry from the glory days in 2004 when the shares were priced at almost £5 each.
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