French Connection has been sold in a deal valuing the British fashion retailer at 29 million pounds.
News emerged last month that the British fashion retailer received a buyout offer of 30 pence per share in cash from a consortium of bidders including its second-largest shareholder, Apinder Singh Ghura, who owns a 24.95 percent stake in the business.
French Connection announced Monday it has accepted the bid, which represented a 30 percent premium on the share price when news of the offer was first revealed in September.
The retailer kicked off a formal sales process back in March after investment firms Spotlight Brands and Gordon Brothers pulled out of takeover talks.
French Connection founder Stephen Marks, who remains the biggest shareholder with a stake of 41.5 percent, said he plans to retire from the company when the transaction closes.
French Connection founder to exit company
“This is an appropriate time for me to step back from the business that I founded in 1972, and I would like to take this opportunity to thank all our people for their contribution to our achievements over the years,” he said in a release.
He said the business has made “significant progress” in its efforts to streamline its store estate and return to profitability over the past five years.
“It was always our intention to look at the most appropriate ownership structure for the business once it was back on track, and, having conducted a formal sale process, the French Connection board has concluded that the offer being made by MIP is fair and reasonable,” he said.
The high street retailer was highly popular in the 90s and early 00s but has struggled in recent years to compete with online competition.
In the year to January 31, group revenue fell 40.4 percent to 71.5 million pounds, compared to 119.9 million pounds a year earlier.
Breaking it down by channel, wholesale revenue dropped 33.1 percent to 49 million pounds, while retail revenue fell 51.8 percent to 22.5 million pounds. Online sales in the year were up 7.1 percent.
French Connection’s underlying loss for the year was 11.7 million pounds compared to 2.9 million pounds a year earlier.
Apinder Singh Ghura, the director of MIP, said: “We are pleased to have reached an agreement with the French Connection directors on this recommended acquisition.
“We are looking forward to working with French Connection’s management to execute and implement MIP's strategic plans to facilitate the future growth and profitability for the business.”