He’s back. After losing billions in the collapse of Babcock and Brown and a host of associated companies in the GFC, Sydney investment banker Phil Green has popped up with what seems to be a winning $16.4 million cash bid for struggling Sydney-based women’s fashionwear retailer Noni B (NBL).
Green has reached agreement with the controlling Lindl family to make a bid for Noni B through his company, Alceon Group.
For that reason (and the fact that many have losses in Non B shares after a succession of downgrades and share price falls this year) non-Lindl family shareholders in the company will stampede to grab the 51 cents a share cash offer.
The offer is conditional on Alceon acquiring 90% of Noni B, so it can move to full control, and is also conditional on Noni B enjoying a revival in sales growth between September and November of this year.
The Lindl family, which owns about 40% of Noni B, intends to accept the offer and has granted Alceon Group an option over 19.9% of the shares, or roughly half the family’s stake.
Alceon Group is backed by Mr Green and run by former investment banker and Babcock and Brown senior executive Trevor Loewensohn.
NBL YTD – Struggling Noni B recommends $16.4m takeover
The takeover offer follows a lengthy strategic review of the company launched after it ran into sales headwinds in the first five months of 2014, which plunged the company from a small profit into large losses.
That saw a slide in same-store sales and profit margins to the point where the company last week reported a $7.8 million loss for the year to June 30, including a loss on trading and a series of asset write-downs. Sales fell nearly 8% in the year to $112 million. That was double the $3.5 million loss in 2012-13.
Compounding the problems in the June half year was a first quarter decision by management (dominated by the Lindl family) not to discount and try and protect margins as a warm late summer became a warm autumn and buyers cut their purchases of winter garments. Then the slide in consumer confidence after the budget hit and it wasn’t until late June/early July that the company saw some steadying and growth in sales.
Noni B directors said the offer price represents a 32% premium to the share price when the strategic review was announced several months ago and a 13% premium to Noni B’s share price of 45c before it went into a trading halt on Monday.
Noni B founder Alan Kindl said the offer would secure the company’s future and ensure that the company remained at the forefront of women’s fashion retailing in Australia.
Noni B shares ended trading yesterday at 49c, up 8.8%, but under the 51c a share offer. No one thinks a counter offer will emerge.
