A group of Farfetch investors have appointed financial advisors to “urgently evaluate options” following the take-private offer by South Korean ecommerce giant Coupang.
The investors claim the proposed sale of the luxury etailer “risks making it unviable for any other bidders to present an alternative, value-maximising offer”, Drapers reported.
The group – named “the 2027 Ad Hoc Group” – hold more than 50% of Farfetch’s 2027 convertible notes worth over £780bn.
It has appointed investment bank Ducera Partners as financial advisors and Pallas Partners as legal counsel to its options.
As part of the Coupang deal, which was announced in December, the firm provided Farfetch access to a £394.7m bridge loan to continue running.
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The offer is subject to an exclusivity period that runs until 30 April where the retailer will become a subsidiary of Coupang, or it is required to pay back the loan with 12.5% a year interest.
If the sale goes through, it will wipe the interest of the 2027 notes and other debt issued by Farfetch to zero.
The 2027 Ad Hoc Group claims that it could achieve better value for the retailer’s assets through alternative routes such as a break-up sale of the assets to interested bidders.
A spokesperson told Drapers: “The group believes this process sets an incredibly dangerous precedent.
“Allowing this transaction to complete fails to maximize the value of the assets of the company, at a time when at least three other credible parties were publicly reported to be interested in all or parts of the business. The group is urgently considering appropriate next steps.”
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