MySale urges shareholders to reject Fraser Group’s £14m offer
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Fraser Group’s efforts to take control of MySale take a hit as board urges investors to reject £14m bid
- MySale, which is on the Aim list, said the offer had undervalued the company and its prospects
- It was also the minimum price Frasers could have offered under city rules
- MySale’s non-executive chairman Carl Jackson has stepped down because he supports the offer
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Fraser Group’s efforts to take full control of MySale took a hit after the company urged investors to reject a £14 million bid because it was too low.
The Australia-based fashion market said Fraser’s 2p per share had undervalued the company and its prospects, noting that this is the minimum price the Sports Direct owner could have offered under the city’s rules.
MySale also announced that non-executive chairman Carl Jackson has stepped down with immediate effect “due to conflicts arising” from being both a director and majority shareholder.
Jackson, who owns an 11 percent stake in MySale, supports Fraser’s offer.
Flash sales site MySale said Fraser’s offering had undervalued the company and its prospects
Fraser, Mike Ashley’s retail giant behind House of Fraser, Flanels and Evans Cycles, took a 29 percent stake in the fashion market in June.
The move made it MySale’s largest shareholder, ahead of Sir Philip Green, who owns 16 percent through Shelton Capital Management, his wife’s offshore vehicle.
In August, Fraser made an offer of 2 cents a share to take control of the rest of the company it does not yet own, valuing MySale at around £13.6 million.
MySale noted that Fraser’s offer was discounted about 26 percent from its closing price of 2.69 pence on Aug. 16, the day before the retail giant announced its takeover offer.
In the 12 months to Aug. 16, MySale’s average closing price was 4.26 pence per share, the company said.
Directors also reiterated that they had not been approached about the offer and had no prior “substantive” discussions with Fraser.
They said this did not allow them to quantify the potential benefits a deal could have in terms of “access to additional brands and volumes of products sold through the MySale platform,” as well as any impact on revenues and profit margins. .
“Directors believe that a price of 2 pence per MySale share does not represent an adequate value or premium for control of MySale and therefore undervalues MySale and its prospects,” the company told investors today.
“Accordingly, the MySale Directors” […] do not consider the terms of the Offer to be fair and reasonable and therefore recommend that MySale’s shareholders not accept the Offer’.
MySale Shares were not traded Friday at 1.9 pence. Fraser Group Shares fell 2 percent to 786p.
MySale is a flash selling site connecting global buyers and sellers to Australian and New Zealand e-commerce sites.