A bid is expected today or tomorrow to privatise the underperforming luxury products retailer, OrotonGroup.
Trading in the company’s shares was halted its request yesterday for at least two days, with the shares down more than 2% at 43.5 cents, which values the company at $18.3 million.
Analysts say the company’s days as a listed group appear numbered with the founding Lane family about to make a final decision on whether to privatise the accessories retailer, sell its controlling stake or recapitalise or refinance the business.
OrotonGroup shares have been halted from trading until Thursday when the board is expected to announce the outcome of a six month-long strategic review.
OrotonGroup’s minority shareholders, who have seen the value of the company fall from $380 million in 2011 (when the shares traded around $9.30) to just $18 million, should be briefed about the future at the annual meeting in Sydney on Friday.
The Lane Family owns 21%, long time supporter Caledonia Funds Management chief investment officer Will Vicars, owns 17% and has lent the company $3 million to fund working capital.
An offer to buy out minority interests would cost the wealthy Lane or Vicars families just $12 to $15 million for the outstanding 62%, assuming a small premium to the current share price of 43.5 cents.
OrotonGroup has also received approaches from potential bidders including Sydney-based clothing retailer Gazal Corp, which acquired a 7% stake in July for $3.1 million at $1 a share and was keen to take control of the Oroton brand.
They might still try a counter offer, but with 38% controlled by the Lane and Vicars interests, it would be an uphill effort.
OrotonGroup appointed investment bank Moelis & Co in June to conduct a strategic review. That has also been considering recapitalising the business or refinancing bank debt.