Briscoes managing director Rod Duke has formally launched a 100% hostile takeover offer for struggling sports and leisure retailer Kathmandu.
The offer, in a mix of cash and script, will dilute Mr Duke's stake to 55% in the new company.
Briscoes (BGR) and Kathmandu (KMD) have not been in talks about the takeover. BGR said it had 14 days to 30 days in which to send the offer to shareholders, at which point a date for offer's closing would be given.
On the issuance of new BGR shares, Mr Duke's 75% BGR stake would fall to 55.1% of the new, combined company.
If the takeover is completed, Mr Duke intends to take the expanded BGR group, which would have annual revenue of more than $900million, to an ASX listing.
Having announced BGR had achieved a 19.9% KMD stake on Tuesday, Mr Duke yesterday offered to acquire the remaining 80.1% of ordinary BGR shares at the equivalent of $1.80 per share.
Given KMD shares were worth almost double the $1.80 a year ago, the question in coming weeks will be whether Mr Duke's script and cash will be enough to entice investors to accept.
The $1.80 equivalent represents a 34% premium on the June 29 share price.
He offered a total 89.7million BGR shares and $32.3million cash; offering KMD investors five BGR shares for every nine KMD shares they hold, plus 20c per KMD share.
However, if enough investors hold out for a better price, Mr Duke would have to consider raising the offer to attain 90%, or exit the plan.
The offer is conditional on BGR attaining a 90% stake, at which time it can compulsorily acquire the outstanding 10%.
