Shares in struggling Melbourne-based retail supplies group McPherson’s plunged 20% at one stage yesterday after the company dropped off the takeover target list when its would-be bidder pulled its offer.
The company told investors on Tuesday that Arrotex had withdrawn its offer following four weeks of due diligence.
The news saw the shares slump to a day’s low of $1.13 from last Friday’s close of $1.45. They ended the session on $1.225, down more than 15% and apparently unloved.
McPherson’s, which sells a range of consumer products in the health and beauty space, told investors the $1.60 a share bid it had received from Arrotex in late April was no more.
The bid had come about following an initial $1.34 a share offer from wealthy Melbourne business man and investor, Raphael Geminder, who owns a 4.9% stake in McPherson’s through his investment company Gallin.
Since then, McPherson’s has undertaken an operational review of the business, with views to focus its expansion into new categories and ranges and reduce costs.
“Following today’s announcement in respect of Arrotex, I now look forward to working with the Board to continue to implement the outcomes of our Operational Review announced on 19 May 2021,” chief executive Grant Peck said.
“We have a clearly defined strategy and are focused on its execution to deliver significant value to our shareholders in the short and long term. There is a substantial opportunity for McPherson’s to gain market share through brand innovation and renovation and category expansion.
McPherson’s reiterated its 2020-21 financial year guidance provided to the market on April 29 for group sales to be in the range of $200 million to $205 million and for FY21 Group underlying EBIT to be in the range of $10 million to $13 million.
Underlying profit could be as much as $13 million under 2019-20’s $23 million and revenue will be down on the $222.1 million reported for the same financial year.
