The Reject Shop gets a takeover bid, and its shares jump

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Shares in the Reject Shop jumped after a $78 million takeover bid for the discount retailer.

A short time ago, the shares were 14% higher at $2.77.

The Allenford Unit Trust made an unconditional cash offer of $2.70 a share.

The Reject Shop, hit by what it says is an extremely weak retail market, last month announced a profit downgrade, sending its shares down 40%.

The board of the Reject Shop called the takeover offer “somewhat opportunistic”.

“The Reject Shop Board continues to believe in the long term growth prospects of our business which has remained profitable amidst the backdrop of a challenging period in the Australian retail environment,” says Reject Shop Chairman William Stevens.

“We remain focused on executing on our customer driven strategy, and realising the benefits from a range of projects we have implemented which leverage the infrastructure, brand and assets of The Reject Shop.”

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