By James Wells
SYDNEY: Betta Stores Limited (BSL) last night responded to a proposal from fellow Newcastle Stock Exchange company Bell IXL Investments on Wednesday to acquire up to 20 per cent of the electrical retailer.
“Under the offer, Bell IXL Investments Limited is offering, for every three shares in BSL, 18 cents cash and 1 share in Bell IXL Investments Limited,” said BSL chairman Patrick Tynan in the statement.
“The Board of directors of BSL confirms the offer is unsolicited and believes it to be predatory, particularly as it takes a low approach in valuing BSL shares."
BSL was concerned that the Bell IXL offer was considerably less than the historic minimum trading price compared to a higher approach taken in valuing Bell IXL shares based on an issue price of 30 cents per share compared to a current market price of 19 cents per Bell IXL shares.
“Further, the offer is discriminatory as it is not available to all BSL shareholders. The Board considers the offer significantly undervalues BSL and is not reflective of the true value of BSL’s shares.
"When assessing the offer, BSL shareholders need to take into account the long term value of BSL, which is expected to be realised through the company’s current refocus on its core business of franchising, sale of corporate stores, wind back of the centralised accounting function and the limited information provided in relation to the Bell IXL securities included in the offer.”