UK retail giant makes hostile bid for Hype DC owner
A British retailer has submitted a zero-premium takeover bid for Australia’s largest shoe store chain after their partnership soured. at least the hope of gaining greater influence over its board.
Frasers Group is offering Accent Group 65 cents a share in a market takeover offer that values the owner of Platypus, Hype DC and The Athlete’s Foot at $390 million.
Accent Group shares, which closed at 65 cents on Friday, rose almost 12 percent to 73 cents by midday Monday.
Frasers owns UK-based sporting goods giant Sports Direct. Accent is launching in Australia in 2025 in partnership with Frasers as part of the project, which will initially be available in 50 stores over six years.
This target was reduced in May to eight stores by December and 30 stores within three years; The 50 store target has been postponed indefinitely, apparently disappointing Frasers executives.
Frasers chief financial officer Christopher Wootton said the British company had significant concerns about Accent’s strategic direction and performance.
“The company’s recent financial performance, capital management and approach to future growth were the catalyst for the decision to launch a takeover bid,” he told AAP.
Frasers said Accent was prioritizing shareholder distributions at a time when earnings were falling, borrowings were rising and growth investment obligations remained.
The British company has concerns about Accent’s strategic direction and performance under chairman Lawrence Myers and the incumbent management team.
“Frasers has made repeated attempts to communicate constructively with the company and the board regarding our concerns, but we have not received a meaningful response,” the statement said.
Frasers currently owns a 22.9 per cent stake in Accent Group, which it bought at an average price of 90 cents, and has a seat on the board.
Under the terms of the partnership agreement in April 2025, Frasers will have the right to appoint another board member if its shares reach 26 per cent.
But under the Companies Act, Frasers must submit a formal takeover bid to buy more shares because its stake in Accent has already exceeded 20 per cent.
“The aim of the bid is therefore to achieve at least this level of ownership, gain additional board influence and make the necessary changes to protect against further decline in the value of Frasers’ investment in Accent,” Frasers said in its bidder statement.
Frasers said it did not expect its bid to take full control of the company.
Accent’s board is evaluating the offer and has told shareholders not to take any action, noting that the offer price does not constitute any premium over Friday’s closing price.
AAP has approached Accent for further comment.
RBC Capital Markets analyst Jackie Moody believes the Frasers’ concerns have some validity.
“Whilst shareholders agree with Frasers’ assessment, we believe the structure of the deal is unlikely to lead to appeal,” Ms Moody said, noting that bonus-free takeover bids are rarely successful.
Last week, Frasers made a €1.98 billion ($3.2 billion) acquisition offer for German fashion brand Hugo Boss.
Frasers, which has a market capitalization of £3.6 billion ($6.8 billion), currently owns a quarter stake in the company.
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