Its shares jumped up to 31c in March after the company revealed that third parties had expressed an interest in buying it. Pumpkin Patch included the announcement in its unaudited results for the six months ending January 31.
“The board believes it is in the company’s interests to seek formal proposals in respect of either an acquisition of the company or in respect of recapitalisation,” the report says. “Further announcements to the market will be made if any proposal received represents a realistic option for the company.”
Chairperson Peter Schuyt on Friday said that this realistic proposal had not presented itself: “The company, and its advisors, held discussions with a number of interested parties but these did not result in any proposals being received that, in the board’s opinion, represent satisfactory outcomes for the company.”
Schuyt says Pumpkin Patch’s board intends to continue focusing on its performance improvement initiatives. He says this will deliver greater value to shareholders over the medium term than any alternative presently available.
The NBR quoted an unnamed market source who said he was not surprised the review had not resulted in Pumpkin Patch’s sale.
“A capital raising has always looked very hard to me until it can prove the performance is going in the right direction. If they can’t demonstrate the business has a long term future, it’s hard to raise capital and hard to sell.”
The source said that although Pumpkin Patch had a good market position, it was limited by a lot of debt and off balance sheet lease commitments.
Pumpkin Patch shares have now dropped to just 20c.