A key shareholder in online clothing retailer N Brown is looking to take the company private after more than 30 years as a listed entity.
Falcon 24 Topco, a newly formed company owned and controlled by Joshua Alliance, intends to acquire the entire share capital of N Brown. Joshua Alliance currently owns 6.6% of N Brown.
The deal agreed with the company’s board is for 40p, representing a 48.1% premium on the last available price of 27p per share.
It values N Brown, which saw its share price climb as high as 500p in 2014, at £191 million. Its market cap currently stands at just under £181m.
Even the move to online shopping during COVID didn’t see the share price rise much above 70p.
If approved by shareholders, the deal will allow them to take up an alternative to the cash offer – one unlisted ordinary share for each N Brown share.
“In light of N Brown’s current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefiting from being listed on the AIM market, whilst having to bear significant costs associated with its listing,” read a notice to the London Stock Exchange.
“The acquisition presents an opportunity to acquire a portfolio of well-established fashion brands, supported by an innovative financial services platform that is currently under development, with a long history and heritage in the UK clothing and footwear market.
“N Brown is better able to achieve its growth potential as a private company than as a public company, taking into account the dynamics of the markets in which N Brown operates, and the broader competitive landscape.”
The acquiring entity says it has confidence in N Brown’s current executive team and leadership, which includes Steve Johnson (interim chair and CEO) and Dominic Appleton (CFO).
The acquisition is expected to become effective in the first quarter of 2025.
“My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business. I am delighted to continue that history,” said Alliance.
“This transaction will support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.
“In the business’ current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets. I am excited about the opportunities created by this portfolio of well-established fashion brands, supported by an innovative financial services platform and its talented executive team and employees.”
Johnson added: “N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business.
“We continue to deliver on our strategy for growth, enabled by a sustainable and efficient operating model, and supporting our people and talent. Today’s announcement… will enable us to accelerate that strategy for the benefit of all our stakeholders.
“The N Brown independent directors are therefore unanimously intending to recommend it to our shareholders.”