Auckland based company Briscoes have announced that they have taken a 19.9% shareholding in Kathmandu Holdings Ltd (ASX:KMD) with the intention to lodge a cash and scrip based takeover offer.
Shares of Kathmandu were in a trading halt until 11am (AEST) this morning. Following commencement of trading KMD shares gained 23% and were last traded at $1.54.
Kathmandu is a chain of a 157 retail stores with a focus on outdoor clothing and equipment. The company has a market capitalisation of approximately AU$251million and is traded on both the ASX and the NZX. Founded in 1987 in Christchurch New Zealand, the company is now based in Australia, New Zealand and the UK.
Briscoe’s is a household name in New Zealand with a market capitalisation of NZ$600million. The company is a retailer with a focus on Homeware and sporting goods. They currently own 46 homeware stores under the Briscoes Homeware & Living and Giving brands and 34 sporting goods stores under the Rebel Sports Brands. The company generated a total sales of NZ$505millon in full year ended January 2015.
Briscoes has over time accumulated a shareholding of 4.99% in Kathmandu. However recently the company acquired an additional 14.91% shareholding from a number of institutional shareholders at a price of NZ$1.80 per share which represents a 29% premium to Kathmandu’s last traded share price on Monday. This brings Briscoe’s total shareholding to 19.9% as they plan to commence a take-over bid. The bid will be cash and scrip based however the exact make up remains unclear. The move from Briscoes comes as Kathmandu’s share price has declined over 44% in the last 12 months.
Briscoes Managing Director Rod Duke stated: "I am excited by the potential that would arise from bringing together these two iconic retailers - we each have strong and recognisable brands that I see as complementary,"
In amidst a falling Australian market yesterday, Kathmandu shares were part of a minority showing positive signs in their share price. The last 12 months have seen a significant downtrend in their value and while yesterday only represented modest gains, it will be interesting to see effect of “bringing together these two iconic retailers”.
Author: Imran Valibhoy
Jun 30, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.