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(Alliance News) - Shares in Superdry PLC surged on Friday as takeover talks progressed, but a deal for the embattled firm is still at a "preliminary stage".
Shares in the Cheltenham, England-based clothes retailer surged 83% to 38.60 pence each in London on Friday afternoon. However, over the last 12 months the stock has plummeted 69%.
On Wednesday this week, Norwegian-based investment fund First Seagull bought a 5.3% stake in Superdry, according to regulatory filings.
On Friday, the Times reported that First Seagull considers Superdry "to be ripe for a bid."
The newspaper added that Sycamore Partners, an American private equity company, and Authentic Brands Group LLC, which owns Ted Baker and Forever 21, are said to have Superdry on their radars.
"It's just a matter of time before there's an offer," a source said to the Times.
https://www.thetimes.co.uk/article/hedge-fund-builds-stake-in-superdry-ppf03xxbj
Following the article, Superdry has since responded to the share price movement.
Superdry Chief Executive Julian Dunkerton confirmed that he is in discussions with potential financing partners. This could include a possible cash offer for the entire issued and to be issued share capital of the company, not already owned by him.
"These discussions are at a preliminary stage and no decisions have been made," Superdry said.
"The transaction committee has provided limited additional information to Julian Dunkerton and the potential sponsors to facilitate further exploration of a possible offer for the company. There can be no certainty that an offer will be made, nor as to the terms on which any such offer might be made."
On Monday this week, Superdry confirmed it is working with advisors to consider "the feasibility of various material cost saving options".
Sky News on Saturday had reported that Superdry is working with PricewaterhouseCoopers on a restructuring plan that could involve store closures and job cuts.
The plan could involve a company voluntary arrangement, an insolvency mechanism that enables businesses to reduce their liabilities to creditors, Sky said without citing sources. This would allow Superdry to close underperforming shops and force through rent cuts, it added.
On Friday, Superdry said: "the company also continues to work with advisers to explore the feasibility of various material cost saving options. Whilst there is no certainty that any of these cost savings options will be progressed, they aim to build on the success of the cost saving initiatives carried out by the company to date and position the business for long-term success."
Last week, Superdry released its interim results, saying challenging markets and poor weather had hurt earnings. The company also is set to lose another finance chief in March.
The retailer posted GBP219.8 million in revenue for the six months to October 28, down 24% from GBP287.2 million a year prior. It swung to a pretax profit of GBP3.3 million from a loss of GBP17.7 million on a statutory basis, but its adjusted pretax loss widened to GBP25.3 million from GBP13.6 million.
It had also announced the replacement of its chief financial officer, with Shaun Wills stepping down after three years with the company on March 31. Giles Davis has been appointed interim CFO, joining Superdry on January 29, with an expected appointment on April 1. Davis will, come April, be Superdry's fifth CFO in as many years.
By Sophie Rose, Alliance News senior reporter
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