Beales’ new chief executive Tony Brown said there was more value in the group’s 11-store chain than was reflected in this week’s offer to buy 21.9% of the company’s stock.
Brown, who joined the department store group from Bhs in June, said that directors at the business decided that the offer from property entrepreneur Andrew Perloff undervalued the company.
“Everyone at the company is awake and alive and enthusiastic,” said Brown. “There is significant work going on and we are pleased with the results so far. There is a tremendous team across the business. Beales is an investment opportunity but the directors are not of a mind to take up the offer and there is more value to get out of the business.”
Investment bank John East & Partners made an offer on behalf of Perloff this week, to buy 4.5 million shares at 36p, via his investment vehicle Wenhedge.
Although the offer was at a 36% premium to the 26.5p share price at the end of July 31, Brown pointed out that the shares have routinely been above this level and were at 37.5p on Drapers’ Sharewatch at the end of Tuesday. The company directors said they would not accept the offer in respect of their own shareholding.
Perloff already has a 6.3% stake in Beales, and would have about 28.23% of the stock if his latest offer was accepted.
Beales’ like-for-like sales fell 6.4% for the six months to May 3. Total sales were £27 million. However, group pre-tax profits rose to £881,000 compared with £875,000 the previous year, thanks to cost reductions.
In June, chairman Mike Killingley said the firm aimed to reverse the sales decline.