Edinburgh Woollen Mill Group billionaire Philip Day has received the backing of Bonmarche for a £5.7 million bid after a U-turn by the clothes retailer.
The group said it now recommends shareholders accept the 11.4p-a-share offer tabled in April after a “poor” first quarter has cast doubt over its full-year profit out-turn and the group’s financial stability.
Bonmarche warned that its auditor had said it was likely to include a reference to the “uncertainty with regard to going concern” due to the trading troubles.
Stockport-born Day, who owns an animal sanctuary in Fife, led a management buyout of Edinburgh Woollen Mill in 2001 and bought the company himself the following year. He also owns the Jaeger, Peacocks, Austin Reed and Country Casuals brands.
Bonmarche said: “Whilst the board’s view remains that the offer does not adequately reflect the potential longer-term value of the business, the increase in uncertainty that has developed reflecting the trading and financial position of the business during the first quarter of the financial year makes the certainty represented by the offer potentially more attractive in the short term.
“As a result, the board of Bonmarche, which has been so advised by Investec as to the financial terms of the offer, is now of the view that the terms of the offer are fair and reasonable.
“The board therefore recommends that shareholders accept the offer, as they intend to do so in respect of their own beneficial holdings.”
