The board of British maternity and nursing brand Seraphine is recommending its shareholders accept an offer to be taken private.
The company announced Friday it has reached an agreement on the terms of a cash offer by Bidco, a wholly-owned indirect subsidiary of funds managed by Mayfair Equity Partners.
The offer of 30 pence per share values the London-based label at approximately 15.3 million pounds.
It represents a significant discount on the company’s IPO share price of 295 pence per share when it went public in July 2021.
The brand, which has been worn by the likes of Kate Middleton and Kate Winslet, has struggled in the past 12 months, with its share price plummeting.
Seraphine chair Sharon Flood said Friday the company faced “an extraordinary convergence of challenges since listing in 2021 including the global supply chain crisis, the cost of living crisis, and substantial inflation in online marketing costs”.
She said that while the broader fashion and retail sector has been impacted, Seraphine was “disproportionately challenged” due to it being a relatively small company new to the London Stock Exchange and with a large reliance on e-commerce.
Mayfair Equity Partners’ offer represents a premium of approximately 206 percent based on Seraphine’s share price of 9.8 pence as of closing bell on January 19.
Flood said: “Despite the huge efforts of our people and management, who have managed to improve gross product margin, achieve higher basket sizes and expand into several new markets, the business continues to operate in a very uncertain and challenging market.
“Whilst we are cautiously confident in our ability to restore profitable growth in the future, additional capital now would enable us to make investments to accelerate our growth strategy. Seeking this capital on-market would likely be highly dilutive, and the restoration of value would take time.”
In the year to April 3 2022, Seraphine’s pretax loss widened to 36 million pounds from 3.8 million pounds a year earlier.
Despite the loss, the group posted a 28.8 percent increase in product revenue to 44 million pounds.