Department stores chain Beales accepts cut-price £1.2m takeover offer
- Credit: Archant � 2013
Department stores chain Beales, which includes eight branches in the East of England, has accepted a cut-price takeover by its biggest shareholder.
The offer from Andrew Perloff, whose firm Panther Securities and its associates own nearly 30% of Beales, values the company at £1.2million, a 48% discount to the price at the close of trading last Friday.
Beales described the offer value as disappointing but admitted that, in view of its complex capital structure, its shareholders may wish to accept the “certainty” provided by the proposal.
The company, which was founded in 1881 and has its flagship store and headquarters in Bournemouth, trades from a total of 29 stores. These include branches in Lowestoft, Beccles, Diss, Saffron Walden, Wisbech, King’s Lynn, Peterborough and St Neots which were among 19 stores acquired by Beales from the Anglian Regional Co-operative Society in a £7.5m deal in 2011.
Mr Perloff’s companies also own the freeholds of 11 Beales stores and have provided the business, which has posted a number of hefty losses in recent years, with a loan of £1m.
Beales said today that a new management team had been successful in stabilising and improving trading but that business conditions remained volatile and difficult to predict.
Like-for-like sales were 1% higher in the 26 weeks to November 1 but trading over the nine weeks to 3 January was challenging with a weak autumn followed by a strong festive period.
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Chairman William Tuffy said the proposal offered “the certainty of a cash exit for shareholders” and improved the medium term financial security of the Beales business.
Mr Tuffy added that realistic alternatives to raise additional capital could not be achieved without the support of its major shareholders.
He said: “We believe that this proposal represents a better alternative for all stakeholders than the business continuing with its current capital structure, given the level of risk this would entail.”
In July last year, Beales angered Mr Perloff when directors voted to remove Panther’s representative, Simon Peters, from the board. Mr Perloff responded by saying it was “foolish” for a company to upset its landlord, its largest shareholder or those which provided it with finance, and to sack a director who was knowledgeable and well-connected.
“In one fell swoop Beales has managed all of these, which must be some type of record,” he added. “It is hard to understand their logic.”