Retail company N Brown is poised to be taken over by a firm owned by its non-executive director, Joshua Alliance, as it plans to delist from AIM. The announcement saw the company's share price surge by over 40 per cent.
N Brown, the owner of brands such as JD Williams and Simply Be, cited the dwindling interest in º£½ÇÊÓƵ small-cap stocks and the expenses related to its listing as reasons for the unsuitability of the investment platform, as reported by .
The company which is based in Manchester, stated: "Bidco believes that, in light of N Brown's current shareholder structure and very low trading liquidity, and the limited º£½ÇÊÓƵ fund manager appetite for small cap consumer stocks, N Brown is not benefitting from being listed on the AIM market, whilst having to bear significant costs associated with its listing."
The acquisition will be carried out by a new company owned by Joshua Alliance, a non-executive director.
Completion of the acquisition is expected in early 2025, pending shareholder approval. The deal, priced at 40p per share, values the company at approximately £187m, a substantial premium to its current market cap of £126m.
Joshua Alliance expressed that the acquisition would: "Support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business". He further added, "In the business' current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets."
The firm has been wrestling with broader economic challenges. N Brown witnessed its turnover fall by 9.8 percent to £601 million in the 52-week period ending 2 March 2024, while its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) saw a reduction of 12.5 percent descending to £47.6 million.
Interim executive chair and CEO of N Brown, Steve Johnson, remarked: "N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business."
"Today's announcement from Bidco will enable us to accelerate that strategy for the benefit of all our stakeholders. The N Brown independent directors are therefore unanimously intending to recommend it to our shareholders."
