// Bonmarche says £5.7m takeover offer Philip Day “materially undervalues” the retailer
// Day, who owns the Edinburgh Woollen Mill Group, recently acquired more than half of Bonmarche’s shares, triggering a mandatory takeover bid
// Bonmarche advised shareholders to take no action in relation to their shares
Bonmarche has rebuffed a £5.7 million takeover offer tabled by Philip Day, saying it “materially undervalues” the retailer.
Earlier this month Day, who owns the Edinburgh Woollen Mill Group, acquired more than half of Bonmarche’s shares through holding company Spectre, which triggered a mandatory takeover bid.
City rules stipulates that a shareholder must make a takeover offer once their stake in a company surpasses the 30 per cent threshold.
Earlier this month, Day bought more than 26 million shares, representing 52.4 per cent of the struggling firm.
Bonmarche told shareholders on Friday to “take no action”, deriding Day’s offer as too low.
At 11.445p per share, the offer values Bonmarche at just £5.7 million.
“In view of Spectre’s position as the majority shareholder in Bonmarche, the board has sought to engage with Philip Day to discuss the future plans for the business for the benefits of all stakeholders,” the retailer stated.
“The board will be writing to shareholders with its formal response to the mandatory cash offer once the offer document has been posted by Spectre.
“In the meantime, Bonmarche shareholders are strongly advised to take no action in relation to their Bonmarche shares.”
Bonmarche added that, in light of the fourth quarter, it was planning a number of “cost reduction actions across the group and anticipates starting the implementation of these shortly”.
At the time of Day’s takeover offer, Spectre said it would undertake a profitability assessment on Bonmarche’s estate of more than 300 stores and shutter under-performing sites or reduce costs by cutting the number of staff or seeking a lower rent.
It comes after Bonmarche issued its third profit warning in just six months in March.
The womenswear retailer said it has seen “significantly weaker” trading since the start of the month, reversing a bounce-back in January and February after it resorted to heavy discounting to shift stock.
Day’s Edinburgh Woollen Mill Group retail empire comprises the eponymous retailer, Peacocks, Austin Reed, Jaeger and Jacques Vert.