Moss Bros heads to stock market exit, Crew Clothing owner to pay £22.6m for firm
Mar 12, 2020
Moss Bros is returning to private ownership with news on Thursday that Brigadier Acquisition Company and the retailer “have reached agreement on the terms of a recommended cash offer.”
Brigadier is controlled by Menoshi ('Michael') Shina, the owner of Crew Clothing. He’s buying the “entire issued and to be issued ordinary share capital of Moss Bros”, which means the firm is likely to be de-listed from the London Stock Exchange, assuming shareholders approve the deal. The acquisition will happen “by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act”.
So what will Moss Bros shareholders be getting? The buyer is paying 22p in cash per share for the menswear retailer, which values it at £22.6 million. And while its shares leapt on Thursday morning from 13.7p at Wednesday’s close to over 20p, that still puts them lower than the almost-21p they were trading at less than a month ago.
That said, the offer price still represents a premium of 30.2% compared to the average closing prices over the last month and 10.6% to the prices over the last six months.
Moss Bros’s directors said they see the terms of the acquisition as “fair and reasonable” and are recommending that shareholders vote in its favour.
The directors have already pledged their shares in support of the deal, although that only adds up to 2.6% of the share capital. But Brigadier said it “has also received an irrevocable undertaking from one of Moss Bros's largest shareholders” to vote in favour, adding up to another 10.1% of the capital.
The buyer needs to get the support of the owners of 75% of the share capital for the deal to go through.
Assuming that happens, the acquisition is expected to become effective in the second quarter.
Menoshi Shina said of all this: "We are delighted that the directors are recommending our offer to acquire the business, as we greatly admire the heritage and 169-year history of Moss Bros and the quality and determination of its existing management team. We believe that Moss Bros can have a bright future in the private arena and are excited to contribute our expertise and assist in delivering the current strategy.
“We see the acquisition as an opportunity to partner with an excellent management team to improve Moss Bros's financial performance and protect its heritage, brand and presence on the UK high street.”
Meanwhile, the retailer’s chairman, Colin Porter, added: "In September, the board of Moss Bros set out its strategy to drive long-term performance and we have seen some early positive results which support the board's confidence in Moss Bros as a standalone entity.
“However, the board is also aware of the risks attached to executing this strategy in the current retail operating environment and as a publicly-listed company. Having considered a range of strategic options, the board believes that the terms of the acquisition, which offers a premium cash exit to Moss Bros's Shareholders, fairly reflect the value of Moss Bros and its prospects, taking account of these risks.”
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