The offer is for five Briscoe Group shares for each nine Kathmandu shares plus $0.20 per Kathmandu share.
Briscoe Group managing director and majority shareholder Rod Duke says this offer is a very attractive one.
“The offer is an opportunity for Kathmandu shareholders to receive a premium for their shares in Kathmandu and to share in the benefits that would arise from being a shareholder in a larger and more diversified retail group,” Duke says.
Bringing Kathmandu, Briscoes and Rebel Sport together under one umbrella would create an Australasian retailing group with annuals sales of over NZ$900 million and a market value of $847 million.
Taking on Kathmandu would mean a net debt of $96.8 million, compared to Briscoes formerly debt-free net cash and balance sheet of $89.7 million in January.
Duke says having the strength of Rebel Sport and Briscoes behind Kathmandu would help its performance.
“The combined group would have a broader and more diverse product offering that would be able to naturally compensate for seasonal trading patterns,” he says.
The outdoor clothing and equipment retailer struggled to come back from aggressive discounting and poor sales over the summer season.
It posted a $1.8 million loss in the six months ending January 31.
Briscoe Group chair Rosane Meo says Kathmandu would benefit from Rod and his management team’s retailing expertise.
“They have established Briscoe Group as a leading retailer with 80 stores across New Zealand within the homeware and sporting goods retailing sectors,” Meo says.
Briscoe Group points out it has delivered a shareholder return of 234 percent since 2009, compared to Kathmandu’s negative 19 percent over the same period.
Kathmandu released a statement acknowledging Briscoe Group’s intention to take over the company.
It says it’s not ready to comment further, as its board is meeting to consider the takeover.
“Until the board of Kathmandu has given further guidance, shareholders are strongly advised to take no action in relation to Briscoe’s notice of intention to make a takeover offer,” the statement said.
Kathmandu’s shares have dropped and are sitting at $1.72. Briscoe Group’s shares have risen to $2.84.