Coronavirus: Moss Bros shares dive as bidder looks for exit
Shares in Moss Bros plunged more than 20 per cent today after the menswear firm said Brigadier Acquisition Company was seeking to pull out of a £22m deal to take it private due to coronavirus.
The suit retailer said this morning that it had been informed by Brigadier, which owns Crew Clothing, that it is seeking a ruling from the Takeover Panel to cancel its offer.
Brigadier is unable to pull out of the deal, which was announced last month, unless it can prove that coronavirus has been of “material significance…in the context of the offer”. Moss Bros opposes Brigadier’s attempt to retract its offer, the company said.
“The board confirms that it will take all necessary action to make its case that those requirements have not been met and that the offer should not therefore be permitted to lapse,” the high street retailer, said in a statement this morning.
Nick Burchett, fund manager at Cavendish Asset Management, which owns a six per cent stake in Moss Bros said it was too late for Brigadier to back out of the deal.
“While I thought the timing of the deal was opportunistic but unwise in March with the crisis looming on the horizon, you can’t back out of a deal at this stage,” he said.
Concerns have also been raised that, if the Takeover Panel allows Brigadier to pull out, it could set a precedent for future deals.
Burchett cited WPP’s takeover of Tempus in 2001, which went ahead despite the 9/11 attacks, as evidence that the Moss Bros takeover should also continue.
“If the Moss Bros acquisition falls through it could start a worrying trend for future deals,” he said.