Shares in Specialty Fashion Group (SFH), the owner of Katies and Millers womens’ clothing chains, soared 26% after it received a surprise takeover offer from a Middle Eastern investment company.
Specialty Fashion’s share price soared to 65.5 cents, up almost 26% by the close.
The company confirmed that it is in talks with an undisclosed investment company from the Middle East, which has offered 70% a share in a bid that values the underperforming company at about $135 million.
The offer is a premium on the 52 cents a share price for Speciality Tuesday’s close, before news of the takeover emerged yesterday morning.
The bid, if successful, would see the retailer becoming a private company.
Speciality Fashion says it has granted the bidder access to its books for due diligence but there is no certainty any deal will go ahead as a number of conditions need to be satisfied.
The group’s acquisition of troubled clothing chain Rivers in 2013 has been a drag on earnings for the past two years. But Rivers’ losses had halved during the 2016 financial year in a sign its fortunes are turning around as excess stock was sold off and costs cut.
The company also owns clothing brands City Chic, Autograph and Crossroads, and has previously said it expected Rivers to begin turning a profit during its 2017 financial year.
