Proposes delisting upon acquisition.
Godfreys 99 year-old co-founder, John Johnston, who is also a director of Arcade Finance (the largest holder of Godfreys shares) has submitted a conditional all-cash off-market takeover bid.
He has also proposed the floorcare specialist transition from a publicly-listed company to a private company environment with its share price plummeting more than 34% since the release of its 1H18 results announcement.
“This offer is particularly attractive in the context of Godfreys continued long-term share price decline, first half results, level of debit, and the announcement that the interim dividend is not going to be paid,” he said in a letter to shareholders published on the Australian Securities Exchange (ASX).
“Arcade’s associate, 1918 Finance Pty Ltd is the lender of the $30 million secured debt facility to Godfreys. Arcade believes that the restructuring required to restore Godfreys value would be best carried out in an un-listed private company environment.
“Therefore, Arcade proposes to remove Godfreys from the ASX official list upon acquisition to give Godfreys the best opportunity to restore its value and restore the confidence of its employees, franchises and suppliers with respect to its performance,” the letter continued.
The offer will open on 24 April 2018 and closes on 24 May 2018 unless withdrawn or extended.
Godfreys responds to bid
In response to the takeover bid, Godfreys Group Limited issued a statement that reads, “Until the board of Godfreys has given further guidance, the company recommends shareholders take no action in regards to the unsolicited offer. The directors will carefully consider the proposal.
“As part of the assessment of the offer, the board will appoint an independent expert to provide an opinion as to whether the offer is fair and reasonable.
“The directors will keep shareholders informed of any further developments and will continue to act in shareholders’ best interests to maximise the value attainable from any transaction.”