99-year old cofounder wants to clean house at Godreys with takeover bid
The 99-year old cofounder of vacuum cleaner group Godfreys is seeking to take over the company as its share price slips to a quarter of its 52-week high.
In a letter to shareholders, John Johnston – former founder and now director of its largest shareholder, Arcade Finance – told the market he intended to remove the company from the ASX, offering 32c for each share.
That’s at a 50 per cent premium to Tuesday’s open price of 21c.
“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,” he wrote.
The offer comes as the company (ASX:GFY) is trading 75 per cent below its 81c high in August – and well short of its $3.55 peak in August 2015.
“This offer is particularly attractive in the context of Godfrey’s continued long-term share price decline, 1H18 results, level of debt and where, on 20 February 2018 the Godfreys board announced that the interim dividend is not going to be paid,” the letter went on.
In response to the unsolicited bid, the group has told shareholders to take no action until it appoints an independent expert to provide opinion.
“The company will provide to shareholders a target’s statement within the required period after the release of Arcade’s Bidder’s Statement, which will include the independent expert’s report and the board’s recommendation on the offer,” it said.
Newly appointed chief Jason Gowie has previously foreshadowed a challenging period ahead.
“We are confirming the continuation of a negative like-for-like sales trend which has been consistently around minus six to seven percent for the last three halves. It was clear to me when I joined Godfreys in early December that there is fundamental value in the business but there is a need for change,” he told shareholders at the half year result in February.
Half year results pointed to weaker than expected Christmas trading – down $6.3 million in the same period last year.