WOMENSWEAR retailer Bonmarche claims a £5.7m takeover offer by Philip Day undervalues the company.
Last month Mr Day, who owns Edinburgh Woollen Mill Group, acquired more than half of the company’s shares through holding company Spectre, triggering a mandatory takeover bid.
Bonmarche, which has stores in Carlisle and Dumfries, told shareholders to take no action, deriding the offer as too low and said it was to embark on a cost-cutting exercise.
It planned a number of cost-reduction actions in the group and anticipated starting the implementation of these shortly.
The firm said: “In view of Spectre’s position as the majority shareholder in Bonmarche, the board has sought to engage with Philip Day to discuss the future plans for the business for the benefits of all stakeholders.
“The board will write to shareholders with its formal response to the mandatory cash offer once the offer document has been posted by Spectre.
“In the meantime, Bonmarche shareholders are strongly advised to take no action in relation to their Bonmarche shares.”
Mr Day bought more than 26 million shares, representing 52.4 per cent of the struggling firm in April.
Spectre said at the time that it would undertake a profitability assessment on Bonmarche’s estate of more than 300 stores and shut under-performing sites or reduce costs by cutting the number of staff or seeking a lower rent.
It comes after Bonmarche issued its third profit warning in just six months in March.
The womenswear retailer said it had experienced “significantly weaker” trading since the start of the month, reversing a bounce-back in January and February after it resorted to heavy discounting to shift stock.
Mr Day’s name has been linked with several retail turnarounds. He was recently named as a bidder in the race for collapsed womenswear brand LK Bennett, although he later withdrew from the process.
Last year he was one of the potential buyers circling House of Fraser, which was eventually sold to Sports Direct owner, Mike Ashley.
His other investments include Peacocks, Proquip, Austin Reed, Country Casuals, Jaeger and Jacques Vert.