WAKEFIELD, United Kingdom – Bonmarché Holdings said on Wednesday it was now considering the buyout offer from Philip Day's Spectre Holdings Ltd, calling it "fair and reasonable" after the women's fashion chain posted poor trading conditions in the first quarter.
Bonmarché had previously said the offer from the British businessman's firm was "inadequate," but the retailer changed its stance after it warned of challenges in the clothing market, exacerbated by unseasonal weather in the UK.
Spectre, which already holds 52.4 percent of Bonmarché's shares, has made an offer under British takeover rules to buy the company's remaining shares at 11.445 pence per Bonmarché share.
Bonmarché shares tanked 25 percent in early dealings on Wednesday after it recommended that shareholders accept Spectre's final offer, which represents a discount of nearly 29 percent compared with Bonmarché's closing price of 16 pence on Tuesday.
Bonmarché on Wednesday also said it had been told by its auditor PwC during informal talks that without a clear indication of trading having improved by the end on July, it may have to include a line in the audit report to show it was concerned about the company being able to operate as a going concern.
The company's shares have plummeted 59 percent so far this year, with Bonmarché in March warning on sales as it discounted heavily to clear unsold apparel as more consumers move online.
Retailers and supermarkets have posted only modest growth in the last 12 weeks during a wet start to the summer, industry data showed on Tuesday.
By Pushkala Aripaka and Noor Zainab Hussain; editors Gopakumar Warrier and Bernard Orr.