By Patrick Avenell
SYDNEY, NSW: The Breville Board has today urged its shareholders to reject Sunbeam owner GUD Holdings’ offer for the company. The board has written to shareholders, telling them GUD can pay “significantly more” for this acquisition.
Shortly after rejecting the offer on behalf of the Breville Board, chairman John Scholl said that none of the boardmembers would be selling, and that all other shareholders should do the same.
“The Breville Board has carefully assessed GUD’s offer and each director has decided to reject GUD’s offer in relation to their own shares in Breville,” Scholl said.
“The Board also unanimously recommends that Breville shareholders reject GUD’s offer.”
In addition to Sunbeam, GUD Holdings also owns the Oates, Ryco, Davey and Lock Focus brands. Breville Group owns Kambrook and distributes the Philips brand of personal care products.
The key reason for this rejection is the Breville Board’s belief that GUD is not offering for Breville considering the former’s resultant strategic position should the acquisition progress. Breville believes that GUD can and will pay more to achieve this takeover. Should the takeover occur, GUD’s position in the small appliance sector of Australia would be formidable at worst, and all-powerful at best.
Another sticking point for the Breville Board is the manner of GUD’s offer. Rather than offer cash for this purchase, GUD is offering shares in itself. Breville has asked GUD to provide profit and earnings guidance to assist them in analysing GUD’s offer, but this request was not fulfilled.
Other reasons listed by Breville are that Breville’s biggest shareholder has not declared its intention, the prospect of a higher offer from GUD in the future, and that GUD’s offer was not unconditional, and is not thought to be final.