(Alliance News) - Joules Group PLC shares surged on Monday morning after it confirmed a weekend press report that it is in discussions with FTSE 100-listed retailer Next PLC about a potential equity investment.
Shares in the Leicestershire, England-based country lifestyle retailer were up 45% at 48.00 pence each in London. Despite Monday's steep climb upwards, the shares are still down 66% in 2022 and have fallen a mammoth 83% in the past 12 months.
"Joules confirms that it is in discussions with Next about adopting its Total Platform services to support the group's long term growth plans," it explained.
The move, if it goes ahead, will see Next inject about GBP15 million into Joules, noting the price will be "at no less than Joules' current market price".
As a result, Joules said Next would become a "strategic minority shareholder" in the lifestyle brand, without confirming the size of the stake. The equity investment would be subject to approval by Joules' shareholders, it added.
At the weekend, Sky News reported Next was in talks to acquire a 25% stake in the 33-year old brand, founded by Tom Joule.
https://news.sky.com/story/next-swoops-for-stake-in-struggling-lifestyle-retailer-joules-12666666
Shares in Next were 0.1% higher at 6,448.00p.
In early July, Joules confirmed it was in talks with KPMG International Ltd to shore up its balance sheet. The company was responding to a Sunday Times report which stated that KPMG's debt advisory arm is exploring options to solidify the retailer's cash position. Options being mulled at the time included a capital raise, the Sunday Times reported.
The call to KPMG followed an update in early May that its profit in its Easter trading period slumped, along with news its chief executive is set to exit the company.
CEO Nick Jones outlined plans to step down from his role during the first half of the group's next financial year, with the current year ending in May.
By Paul McGowan; paulmcgowan@alliancenews.com
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