Moss Bros receives offer from Baugar

Source: Retail Digital

Date :26/02/2008 11:00:02

Moss Bros Plc, the struggling UK menswear chain, has received a takeover offer from Baugur, the Icelandic investment group.

Baugur has provisionally offered 42 pence a share, valuing the company at £40.2million.

The deal is recommended by the board but does not have the support of Mark Bernstein, a non-executive director who represents shareholders from the Moss family.

Together with the Gee family, the families account for more than 25 percent of the equity.

The families fear that Baugur is trying to buy the company “super-cheap.” Michael Gee, who is a shareholder and whose brother is a non-executive director argued that the company had been managed in a "woeful" manner.

Earnings

The takeover bid comes as the menswear chain reported its 2007 earnings.

In a statement yesterday, it said total sales for 2007 were down 3.2 percent as a result of planned store closures, the result of competition from supermarkets, fewer marriages and the general slowdown in consumer spending.

Unity stake

Baugur first took a stake in Moss Bros as part of the Unity investment vehicle alongside FL Group and Kevin Stanford, the co-founder of Karen Millen, in the summer of 2006.

Unity has a 28.75 per cent shareholding and two directors on the Moss Bros board, including Don McCarthy, the chairman of House of Fraser, itself now part of Baugur's UK portfolio.

The stake controlled by Baugur has lost almost half its value since 2006.

Laura Ashley, the retailer controlled by Malaysia's MUI Group, holds 5.4 percent of Moss Bros.

February 26, 2008