SWIFTLY tossed out yesterday as ''wholly inadequate'' was an expected
bid for fashion retailer A Goldberg & Sons from Blacks Leisure Group.
The all-paper terms value Goldberg at 192p a share, equal to around
#32.9m.
The offer is 22 new Blacks Ordinary for each Goldberg share with no
cash alternative. The Charterhall stake, representing 29.9% of the share
capital, is being pledged in support.
That seems as far as it will go at present, because the idea of
putting two under-performers together must lack appeal in the present
trading climate. The Staffordshire-based Blacks Leisure took in the
former Blacks of Greenock camping business, but even before that got off
to a difficult start with the Greenfield acquisition.
The track record includes four loss-making years, until refinancing
and a stream of acquisitions finally turned it round last year. Recent
figures produced pre-tax profit of #3.1m on a #48m turnover, quite close
to Goldberg's performance until the recent disastrous #2.9m loss.
Blacks' new chief executive, Mr Simon Bentley, clearly an optimist,
hoped the Goldberg board would recommend his offer. He described it as
an opportunity to share in the future success of the substantial and
commercially balanced retailing and fashion group the merger would
create.
An accountant who joined Blacks board last October, he claimed the
offer was well above the market price before speculation about his
group's interest, though in fact Goldberg shares have been reflecting
bid interest from Russell Goward's Charterhall group for more than two
years. Last night they closed 5p higher on 180p with Blacks an unchanged
83!/;3/p.
Admitting to a 100% gearing level with net assets of #7.3m, Mr Bentley
told me: ''Our value is in earnings per share, for which we have paid
heavily.'' He disclosed having had a meeting with Mr Mark Goldberg,
chairman and chief executive, but said it had made no progress. He
maintained that a cash alternative to the offer would not be justified,
because what they had in mind was in the nature of a merger.
''We have tremendous management skills, very successful general sports
businesses, as well as menswear operating from 97 in-store outlets and a
fashion and textiles division,'' he said, claiming that merger would be
a very positive thing.
Among the moves which Blacks has in mind is cutbacks to reduce
overheads, with Goldberg's head office in Glasgow a target and the
admission that some rationalisation may be necessary in the workforce.
Last night Mr Goldberg promised a detailed response to any offer
document in due course, but said his first reaction was of regret that
in the midst of working flat out in pursuit of the group's new strategy
the management time was being diverted to confront this new situation.
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