Accent Group urges shareholders to reject Frasers’ "opportunistic" takeover bid

Australia’s Accent Group has called on shareholders to reject a takeover bid submitted by Frasers Group. An independent committee established by Accent found that the timing of the deal was “opportunistic”, having come amid weak retail conditions and prior to potential benefits accumulated through ongoing growth initiatives.

In a filing, Accent said the offer, at 0.65 Australian dollars per share, undervalues the company and sits below its most recent market price, meaning shareholders would receive no premium for surrendering control. The price is also lower than what Frasers previously paid for shares, Accent added before claiming that the British retail giant is seeking greater control, including board representation, without paying for it.

The group further stated that the bid undervalued an ongoing long-term growth strategy, 2030 Strategic Growth Plan, which targets at least 1.9 billion dollars in sales, a 9 percent EBIT margin and around 950 stores by 2030.

Accent expressed additional concern over Frasers’ efforts to increase exposure of its flagship business, Sports Direct, in the ANZ region, and highlighted a potential conflict of interest that could arise from the deal, which would make Frasers a major shareholder and commercial partner.

Frasers launched its hostile takeover bid for Accent in June, looking to snap up the remaining 77.10 percent stake of the business for around 316 million Australian dollars. Frasers said the offer came in response to Accent’s recent financial performance, capital management, and approach to growth, and was made after repeated attempts to engage with management regarding declining earnings and rising borrowings.