PAS Group gets $69.5 million takeover bid

Published at Sep 22, 2015, in Small Caps

Private company Australia Brands Investment (ABI) has lobbed in a $69.5 million all-cash takeover bid for PAS Group (ASX:PGR), a price which is a 21% premium to its starting trading price today.

In a letter to PGR this morning, ABI said it would appoint Canaccord Genuity to buy up shares on market at 63c each, with either ABI or associated parties, being Coliseum Capital Management, already holding 19.23% of PGR’s shares.

ABI is giving PGR shareholders the opportunity to buy until 9 November, unless the offer period is extended.

At this stage there is no competing bid on the table, with ABI saying it is not inclined to raise the offer price.

So far there is evidence PGR shareholders are taking up the offer despite PGR management urging investors to take no action, with PGR shares skyrocketing by over 22% at the time of writing to 63.5c, above the offer price.

There has been heavy volume as well, with 7.3 million shares changing hands against a 30-day volume average of 73,600 shares.

ABI was set up by Coliseum Capital Management as a limited liability company, and is acting as a vehicle by which Coliseum can add to its 19.3% holding.

ABI said Coliseum was supportive of the board and its current direction, but was launching the bid simply to buy more shares in the fashion retailer.

The PGR Board is yet to respond to the takeover bid, but ABI said the Coliseum team and the PGR board had a “positive relationship”, and said Coliseum had in effect been doing due diligence on PGR for months before floating the bid and even before making the initial investment in PGR back in December last year.

ABI said Coliseum was keen to see PGR continue its investment in bricks and mortar retail, and pursue international brands with an eye towards expansion.

At the moment PGR has a stable of fashion brands under its purview, including Metalicus, Marco Polo, and White Runway.

However, it also licenses brands such as Slazenger, Everlast, Dunlop, and Disney.

During the 2015 financial year, PGR delivered a net profit after tax of $8.8 million from underlying earnings before interest and tax of $20.2 million.

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