Moss Bros deal at risk as buyer gets cold feet
It looks like the company that was planning to take over Moss Bros is getting cold feet with Brigadier Acquisition (which owns the Crew Clothing brand) having applied to the UK's takeover panel to let its 22p a share offer lapse.
But Moss Bros is trying to push the deal through and has noted a requirement that the bidder can't let the offer lapse unless the reason was of “material significance” in the context of the offer. The Moss Bros board said it will take all necessary actions to make its case that those requirements haven't been met. If it makes its case, then the takeover should go ahead.
The £22.6 million deal to take the menswear retailer private was announced earlier this year, only shortly before the coronavirus crisis hit the UK and the government ordered all fashion shops to close. Moss Bros was forced to close its doors only around a fortnight after it had struck the deal.
At the time it was revealed, the takeover offer had looked like an attractive one and represented a 60% premium on the shares’ closing price the day before the announcement. However, a price of 22p still meant that Moss Bros was valued at only around a fifth of what its market capitalisation had been less than two years earlier.
And with news on Wednesday that the potential buyer is trying to get out of the deal, the share price fell even further with a 32% plunge as the markets opened. At the time of writing, the shares are changing hands at less than 14p each.
It's unclear what will happen next and whether either Moss Bros or the unwilling buyer will be successful in their efforts to push through/cancel the deal. It's also uncertain what sort of position this leaves the retailer in during the crisis. While plenty of fashion retailers have shared information about the available cash reserves they have to weather the storm, or their plans to raise more financing, Moss Bros hasn't done so due to the expectation that it would be under new ownership within the next few months.
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