No superior proposal.

Godfreys is recommending its shareholders accept the offer of $0.32 cash per share from Arcade Finance, in the absence of a superior proposal. The offer has been found to be fair and reasonable, it represents a premium to recent trading prices of shares and if the offer is not accepted, there could be “adverse consequences”, according to its independent directors.

Godfreys directors reviewed the offer, against the prospects for Godfreys in the absence of the offer, including its implementation of the turnaround strategy announced on 20 February 2018, its ability to meet its obligations under its current financing arrangements and its ability to obtain alternative funding on favourable terms.

“While good progress has been made in delivering operational efficiencies and progressing those key areas identified requiring further investment, there is no guarantee as to the benefits that the turnaround strategy will realise, nor the time required to realise these benefits,” the company said in a Target Statement submitted to the ASX.

“Current retail environment and trading conditions also remain challenging which is expected to make it difficult for Godfreys to meet its obligations under its current financing arrangements,” the statement continued.

The Arcade offer is scheduled to close at 7.00pm (Adelaide time) on 24 May, 2018.