(Alliance News) - French Connection Group PLC on Monday backed a takeover bid by a consortium that includes its second-largest shareholder, seven months after the fashion brand put itself up for sale, with Founder & Chair Stephen Marks announcing he will step down once the deal concludes.
French Connection has recommended a bid from MIP Holdings Ltd that values it at GBP29 million.
MIP includes KJR Brothers Ltd and Amarjit Singh Grewal, as well as second-largest French Connection shareholder Apinder Singh Ghura.
The 30 pence per share offer is a 92% premium to French Connection's share price on February 4, before it entered an offer period.
French Connection shares were 18% higher at 28.20p each in London on Monday morning, giving the company a market capitalisation of GBP27.2 million.
Back in February, French Connection said it had received two separate takeover tilts. One was from Gordon Brothers International LLC alongside Los Angeles, California-based Spotlight Brands, a boutique consulting agency. It also received a bid from HMJ International Services Ltd in conjunction with New York-based Go Global Retail, a brand investment platform for investors from the textile, apparel and footwear industries.
In March, French Connection entered a formal sales process. Spotlight Brands and Gordon Brothers said they no longer planned to make an offer for the company.
MIP has so far received the backing of 44% of French Connection shareholders in addition to its own shares, including Marks's 39% stake and Nicole Farhi's 2.1% holding. MIP's Ghura has a 25% stake.
Marks, who founded the company almost 50 years ago, will leave once the deal closes.
"When the transaction closes, I will retire from French Connection. This is an appropriate time for me to step back from the business that I founded in 1972, and I would like to take this opportunity to thank all our people for their contribution to our achievements over the years. I wish them all every success in the future," Marks said.
By Eric Cunha; ericcunha@alliancenews.com
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