Owner of Platypus, Athlete’s Foot cops hostile bid from UK shareholder
Accent Group, the embattled footwear and clothing retailer behind Hype DC, Platypus, Lacoste and other brands, has received a hostile takeover bid from UK retail giant Frasers Group after frustration over mismanagement and mismanagement reached tipping point.
Frasers, Accent’s biggest investor with a 22.9 per cent stake, told shareholders it was so dissatisfied with the company’s performance and strategy under chairman Lawrence Myers and chief executive Daniel Agostinelli’s team that it offered 65 cents a share, or $315.8 million, to buy the remaining 485.8 million shares of the group it did not yet own.
Accent’s shares soared on the news, trading 11.5 per cent higher at 72.50¢ just before 1pm AEST.
“Frasers believes that Mr Myers has failed to provide the necessary leadership to effectively guide Accent through its recent poor financial performance and should resign,” the UK bidder said in documents filed with the ASX, citing Accent’s approach to capital management and executive pay and an ASIC investigation into potential insider trading by senior executives including Agostinelli, among other concerns.
“Frasers has made repeated attempts to communicate constructively with Mr. Myers and the Accent board regarding some of the above matters and has received no meaningful response,” the statement said.
Accent operates approximately 900 stores in Australia and New Zealand and has exclusive distribution rights to sell brands such as Vans, Hoka, Henleys, Dr Martens, Nude Lucy and more. However, the company’s share price has fallen by 48 percent in the last 12 months.
Predominantly owned by British retail billionaire Mike Ashley, several issues attracted the attention of the British bidder. Late last year Accent’s board voted in large protest against executives’ pay at its annual general meeting. In February, the company increased its first-half dividend to shareholders while issuing a profit warning.
Corporate watchdog the Australian Securities and Investments Commission is conducting an investigation into potential insider trading by Agostinelli and other executives. Announcing the ASIC investigation last month, Accent’s board said the CEO’s market share sales were pre-approved by the former chairman, that no criminal charges had been made and that Agostinelli “has the full support of the board in his continued role as CEO”.
Then, to top it all off for Frasers, it failed to impress investors at its investor day in mid-May.
“We have great faith in the power of the brands sold through Accent’s retail network, but the company has failed to demonstrate that it can deliver the results these brands deserve,” Christopher Wootton, chief financial officer at Frasers, said in a statement.
The UK company “now considers it necessary to increase its ownership in Accent to gain greater influence over Accent’s strategic direction in order to protect its investment.”
This imprint does not suggest that the claims made by Frasers are valid, only that they are made.
While Frasers has offered to take full ownership of Accent, it has said it would settle for at least a 26 per cent stake, which would allow it to appoint a second person to the board alongside British businessman Dave Forsey, who ran Sports Direct, Frasers’ best-known retail brand, for 15 years.
The documents said Frasers had lost confidence in Accent management’s vision and ability to deliver on its growth plans. Accent had aimed to open at least 50 stores over the next six years, but recent investor day documents revealed that those plans have been scaled back to 30 stores within three years and the 50-store target has been “deferred indefinitely.”
“Frasers continues to believe that the sports retail market in Australia is a positive opportunity for growth and is committed to carrying out the significant work required over the next five years or more to turn Accent’s business on track,” Wootton said.
Accent’s board called on shareholders to hold on to their shares and do nothing until they receive bid proposals in a target statement, saying the price offered was simply the stock’s closing price as of Friday at which no premium was offered, and that the Frasers paid an average of 90 cents per share when it increased its stake in early February, which was “significantly above the offer price”.
The bidding period will start today and end on June 30 at 16:00.
The UK retailer launched a similar offer for Hugo Boss last week. Frasers, which owns a 26 percent stake in Hugo Boss, has offered to pay 1.98 billion euros ($3.3 billion) to buy the rest of the German fashion group.
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Jessica Yun is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect with: X or email.
