Troubled NZ-based adventurewear retailer (and serial downgrader this past year) Kathmandu (KMD) saw its shares back in favour and on the up yesterday after receiving a takeover bid in its home country, NZ.
Briscoe revealed yesterday it had already built a 19.9% stake in Kathmandu, first by buying a 5% holding over time and then swooping to snap up the rest at $NZ 1.80 a share.
Kathmandu shares rose 25.6% to $A1.57 on the ASX yesterday. That’s well above the offer price.
Briscoe said it will lodge a full takeover offer comprising cash and shares “imminently” for Kathmandu, which acknowledged the bid and declined to comment further.
Briscoe owns and operates the Briscoes Homeware and Rebel Sport retail chains in New Zealand, with a total of about 80 stores. Rebel is under a limited franchise agreement with Australian company, Rebel Sport which is owned by Super Retail Group.
Kathmandu has 145 outlets in Australia and New Zealand and four in the UK.
KMD 1Y – Kathmandu surges on Briscoe takeover
"I am excited by the potential that would arise from bringing together these two iconic retailers," Briscoe managing director and majority shareholder Rod Duke said in the statement. "We each have strong and recognisable brands that I see as complementary."
Kathmandu shares have slid over the past year on a series of earnings downgrades. The shares were trading around $2.68 a year ago, so even at the offer price, there’s a big loss for more recent investors.
Kathmandu yesterday acknowledged the announcement made by Briscoe and said there had not been any contact between the two companies, and that Kathmandu “will not make further comment about the imminent takeover offer at this stage”.
At the moment, it looks like Kathmandu will be snapped up cheaply by Briscoes, unless a rival appears. But it is hard to see one emerging, given the way the sector has been performing of late. A European or US retailer could emerge as a surprise counter bidder and get a prime position in the Australasian market.
