The Reject Shop just flagged a $10.5m profit a week before a takeover offer was due to close
With a takeover offer looming, discount retailer The Reject Shop has flagged a $10.5m net profit after tax for the six months to December 2018.
Reject Shop chairman Bill Stevens praised team members for “presenting a November and December store offering that was well supported by our customers”. But the result was in line with a profit guidance issued in October that saw shares drop 44 per cent to $2.50 from $4.47 and had managing director Ross Sudano admitting the company’s performance had been “extremely disappointing” for shareholders.
Barely a month later, Allensford – a global investment group with ties to late Visy chairman Richard Pratt – was incorporated specifically to buy Reject Shop shares.
The fund is wholly owned by Bennamon, which itself is wholly owned by Kin Group, which is a global investment company and family office of Melbourne packaging billionaire Raphael Geminder and his wife Fiona — one of Mr Pratt’s two daughters.
Allensford appointed broker Bell Potter to purchase TRS shares at $2.70 apiece. The on-market takeover offer was due to close on January 22.
But at the same time TRS announced its expected profit, an announcement was also made that Allensford had extended the offer to February 6.
TRS shares opened today at $2.72.
In its release to the ASX this morning, the TRS board has reaffirmed its previous recommendation that “shareholders REJECT Allensford’s offer by DOING NOTHING in relation to that offer”.
Mr Stevens claimed that Allensford’s bidder’s statements issued in December “contained a number of speculative comments in respect of The Reject Shop’s trading performance over the first half of FY2019 that have shown to be unfounded”.
TRS did note, however, that it has “often traded at a loss in the second half”. Commentary on a full year outlook will be provided on February 20.