Philip Day’s Spectre Holdings has deemed Bonmarché’s plans to return the retailer to profitability insufficient.
In April, Philip Day’s Spectre purchased 52.4% of Bonmarché’s ordinary shares, triggering a mandatory takeover bid. Spectre offered to buy the remainder of the shares for the price it paid, 11.45p.
On 8 May Bonmarché directors implored shareholders to reject the takeover bid by Day. It added that cost reduction measures, which have already been implemented, are expected to strengthen the business. Following the expiration of first closing date for the mandatory offer today, Spectre has said it will keep its offer for Bonmarché shares open at the same level until further notice.
It added that it will take a step back to monitor the Bonmarché board’s ability to deliver on its turnaround plans, adding that it “does not believe these plans will deliver value for Bonmarché Shareholders in the medium term” and that it does not believe the “cost saving plan announced by the Bonmarché board will be sufficient to return Bonmarché to profitability”.
In a note Spectre said: “[Spectre] notes the cost-saving strategy set out by the Bonmarché board, which conveniently followed Spectre’s views in the offer document and announcement of the offer. Spectre will monitor this carefully and the performance of the Bonmarché business. Unfortunately, Spectre does not believe the cost-saving plan announced by the Bonmarché board will be sufficient to return Bonmarché to profitability.”
It posted a second profit warning in March after total sales for the 13 weeks to 29 December fell 8.1% year on year.
The business now estimates that the underlying loss before tax for the year will be between £5m and £6m.