Kathmandu has rejected the $A324 million takeover bid by New Zealand retailer Briscoe as inadequate and “highly opportunistic”.
In a formal response today, the board of the adventure clothing retailer unanimously recommended that shareholders reject the unsolicited offer.
“Briscoe can afford to offer a lot more for your shares,” Kathmandu directors said in a note to shareholders. “The timing of the offer is highly opportunistic.”
The New Zealand company is offering five shares for every nine Kathmandu shares plus $NZ0.20 cents for each Kathmandu share.
“The directors of Kathmandu believe that the offer, with an implied value of $NZ1.80 per Kathmandu share is inadequate and does not reflect the underlying value,” the board said.
Its shares closed yesterday at $A1.51.
The directors say the bid doesn’t reflect the strength of the business and plans for growth.
Kathmandu says it expects expects significant sales growth and continued margin recovery in the current financial year with sales increasing 11% to $NZ454.6 million and earnings by 43% to $NZ48.2 million.
For the 12 months to the end of July, Kathmandu sales were up 4.2% to $NZ409.4 million. However, net profit was down 52.6% to $NZ20 million.
Briscoe, a listed company in New Zealand, would also get a back door listing on the ASX from the takeover.
Kathmandu shares are up 2.65% to $1.55.