UK retailer N Brown to delist as London's small caps struggle (updated)
17/10/2024 09:06
(Recasts, adds background)
LONDON, Oct 17 (Reuters) - British online retailer N
Brown Group BWNG.L agreed to a 191 million pound ($248
million) takeover led by its majority shareholder in a
take-private deal, the latest sign of a slump in the country's
public markets for smaller companies.
AIM-listed N Brown, one of the country's top 10 online
clothing and footwear retailers which owns the JD Williams,
Simply Be and Jacamo brands, is suffering from the lack of fund
manager appetite for smaller stocks, said the bidding company.
Britain's stock market has struggled in recent years as some
larger companies have opted for a U.S. flotation over London,
while smaller listed companies have borne the brunt of a
collapse in demand by institutional and retail investors,
according to recent research.
N Brown has been a public company for 50 years, originally
selling clothes via catalogues. But the vehicle set up by Joshua
Alliance - part of the wider Alliance family who, in aggregate,
own over 60% of the company - to take it private said its
listing was costly and no longer made sense.
"In light of N Brown's current shareholder structure and
very low trading liquidity, and the limited UK fund manager
appetite for small cap consumer stocks, N Brown is not
benefitting from being listed," said the statement on Thursday.
Billionaire Mike Ashley's retail company Frasers Group
FRAS.L owns 20% and supports the takeover.
Illustrating the scale of the challenge for smaller
companies, think tank New Financial said UK smaller company
funds have recorded a 36th consecutive month of outflows while
smaller company market debuts plunged by 80% to just 22 over the
past decade.
N Brown shareholders will get 40 pence per share in cash, a
48% premium to the closing price on Wednesday. Shares in N Brown
opened up 43% to 38.5 pence following the announcement of the
recommended acquisition.
($1 = 0.7698 pounds)
(Reporting by Sarah Young and Yadarisa Shabong in Bengaluru
Editing by Shri Navaratnam)
((Yadarisa.Shabong@thomsonreuters.com; +91 9742735150;))