Australian businessman and Sanity owner Ray Itaoui has made a takeover offer of Best & Less Group (BLG) alongside BB Retail Capital, an investment firm founded by Australian businessman Brett Blundy.
Blundy is the founder of Sanity, and is a nonexecutive director of BLG.
Itaoui and BBRC made a cash off-market takeover offer of all the shares in Best & Less Group for $1.89 per share.
BBRC currently has a relevant interest in approximately 16.45% of the BLG shares on issue.
The takeover offer is conditional on a minimum acceptance of 55% - inclusive of the 16.45% relevant interest that BBRC already holds.
The cash offer of $1.89 per BLG share compares to a closing price of $1.985 per BLG share on April 28, 2023 and a volume weighted average price of $1.934 per share in the three-month period ended April 28, 2023.
This announcement is subsequent to the receipt of a non-binding indicative proposal that was received by BLG from BBRC.
The current major shareholders include Allegro Fund III LP and Allegro Services III D Pty Ltd (Allegro), holding 32.43%, and Bignor Family Pty Limited (Bignor), a company associated with Executive Chairman Jason Murray, which holds approximately 8.27%.
Allegro and Bignor have each advised BLG that if the takeover offer is made on the terms outlined in this announcement they would intend to accept it.
Lead independent director Stephen Heath said the offer does not contain a ‘typical control premium’.
“Accordingly, the IBC has determined that the takeover offer should be made available to all shareholders recognising that the decision as to whether to accept the offer or not will be based on individual shareholder preferences,” Heath said.
“We will carefully consider the proposal and provide a formal recommendation in our target’s statement, and we will also commission an independent expert’s report.
“That being said, we note that the offer will provide an ability for shareholders who wish to exit large shareholdings in BLG to do so in an orderly fashion without unduly impacting the Company share price.
“Similarly, the minimum acceptance condition also provides a real opportunity for all remaining shareholders who wish to remain invested in the Company to do so in an entity that, should control pass under the takeover offer, is ultimately controlled by Brett Blundy, an individual with a strong track record of delivering value in the retail sector.”
The BLG Board said Best&Less will run business as usual, with no material changes to the Company’s operations, personnel or strategy during this period. This includes no changes to the prior announcement of Erica Berchtold commencing as CEO of BLG later this year.