Sydney-based women’s fashionwear retailer, Noni B (NBL) waved the ‘look at us’ flag last week in its surprise earnings downgrade, and said independent directors were exploring options for the company’s future.
And now it seems some groups have duly obliged by starting a chat about possible bids, even though the current trading position of the company is pretty weak.
And as a result NBL yesterday told the ASX that it is now considering several takeover approaches.
The news saw shares in Noni B surge 41% to 55c each.
NBL 1Y – Noni B shares surge on takeover talk
With 212 stores in shopping centres across the country, the company is something of a retailing bellweather.
Noni B says the Kindl family, which controls a near 40% stake in the company, is in discussions with the retailer’s independent directors about alternatives to the capital structure of the company.
The company didn’t name the potential bidders, and says there’s no guarantee of the transaction proceeding.
But the market is acting as though there’s one in the offing.
One suggested offer could come from the Kindl family itself to privatise Noni B, according to speculation late last week.
The company last week forecast an annual operating loss for 2013-14 of between $1.8 million and $2.2 million due to falling sales.
That compares with a profit of $1.9 million in the first half of the year, meaning there’s been a sharp slide into losses in the current half.
That slide followed weak trading in the first quarter, and then a slide in sales in April and May due to the abnormally warm weather in southeastern states and growing consumer caution because of the harsh federal budget.
That saw sales fall sharply and up to the end of May they were down almost 8%.
The company is expected to incur a full year loss around $8 million, which includes a $5.5 million writedown of intangibles, on top of the operating loss.
At current levels the company has a market capitalisation of close to $20 million.
