Laura Ashley reported to have received a 20 million pound takeover bid
26 Feb 2019
New York – British fashion and homewares retailer Laura Ashley is reported to have received a takeover bid from a U.S. investment firm, Flacks Group. In a statement issued Monday, Flacks Group said it is in the early stages of evaluating a bid for the struggling retailer.
The apparel group, owned by Malaysian United Industries, addressed both media and market speculation by issuing a communication on Monday evening. "As far as I am concerned, there is no takeover bid because there has been no approach whatsoever. If and when an approach is made, the board will discharge its duties as always and assess it on its relative merits," said Andrew Khoo, chairman of Laura Ashley, in the corporate release, echoed by all British media.
"Whilst I understand why potential parties would think we are significantly undervalued, I have complete confidence that we will be able to grow profitably and in a sustainable manner so as to create long-term value for our shareholders," he added. Earlier on Monday, Khoo said: that "If and when an approach is made, the Board will discharge its duties as always and assess it on its relative merits."
In an attempt to reaffirm their investment in the fashion company and to calm investors, Laura Ashley’s chairman further added “for the record” that as major shareholders of Laura Ashley, they have no intention of divesting from the company.
Laura Ashley’s stock value has halved over the past 12 months
Still, Laura Ashley's shares fell 1.2 percent to 3.2 pence as the potential bid news broke, since the reported offer values the company at 2.75 pence a share. On this note, it’s worth recalling that the stock has almost halved its value over the past year.
Earlier this month Laura Ashley issued a profit warning, dragging its shares yet again, as it revealed an interim loss and advanced lower annual profit.
For the six months to the end of December, the retailer posted a pre-tax loss of 1.5 million pounds compared to a profit of 4.3 million pounds the same period a year ago. Revenue also dropped, withdrawing 8.8 percent to 122.9 million pounds (from 134.7 million pounds) as sales fell.
"Trading conditions have been difficult during the first six months of the year to December 2018," acknowledged the company’s chairman while reviewing the financial results at a press conference. He continued: "Given the continued market turbulence and having reviewed the revised management forecast for the second half year, the board now holds the view that the performance for the entire year will fall short of market expectations."
image: laura ashley web