Rod Duke of Briscoe Group. The company's retreat from Kathmandu raises questions over what it will do with its 20 per cent stake.Credit:Louise Kennerley
The $NZ1.80 ($1.62) bid for Kathmandu fell short of the $NZ2.10 to $NZ2.41 independent valuation of Kathmandu. More than 20 per cent of shareholders,including the biggest institutional shareholder Goldman Sachs,knocked it back. However,deal insiders said a far higher proportion indicated they wouldn't accept it.
In a statement on Wednesday,Briscoe said its offer price was"attractive"and that it saw"no reason to increase it".
On Thursday morning,Kathmandu acknowledged the latest development in the unsolicited takeover bid,reiterating that the company's directors"believe the offer is inadequate and does not reflect the underlying value of Kathmandu".
Kathmandu's newly installed chief executive,Xavier Simonet,is focused on a structural review as it works to rein in costs in the face of sagging profitability,including a 53 per cent slump in full-year profits for 2015.
The group announced a 10 per cent cull in head office staff last week as part of this work and it said the review would run until the end of September.
Briscoe has not commented on its plans for the stake in Kathmandu but market watchers suggest there may be more to the story.
"They've made a play and whether there's another iteration down the track ... in terms of Kathmandu,in an environment where Gerry Harvey is buying diary farms,it's indicative of the structural issues at play in the broader retail industry,"one analyst said.