Renaissance sounds death knell ahead of meeting to sell Yoobee

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

Renaissance Corp ultimately plans to wind itself up once it sells its Yoobee School of Design and deals with its ailing retail business, returning capital to shareholders. The shares jumped 28 percent to 15.4 cents.

The company will ask shareholders at a special meeting on Jan. 29 in Auckland to approve the sale of Yoobee to Academic Colleges Group for a net $13.3 million, with a potential earn-out of up to $1 million based on 2014 earnings. Independent adviser KordaMentha considered the deal fair to the company's shareholders.

The sale comes after Renaissance failed to find a viable plan to deal with its retail business after "another terrible year in 2013," chairman Colin Giffney said in a letter to shareholders recommending the deal.

The proceeds will go towards repaying debt, and would leave cash reserves of about $7 million, most of which will be held to distribute to shareholders on the resolution of its retail issues.

Renaissance's board intends to sell the retail unit, wind up the company and distribute the funds to shareholders.

"As I write, we are still some way from achieving that goal," Giffney said.

Renaissance flagged the sale in October last year, saying its Yoobee-branded Apple only retail stores were no longer viable.

If the sale doesn't go ahead, Renaissance will have to deal with its retail unit and set up Yoobee as a small publicly listed company in its own right.

"In our view, if shareholders elect to reject the proposal, the share price will fall, perhaps quite significantly, until we have resolved the retail issues and, potentially, recapitalised Renaissance," Giffney said. "It could take two years or more for the share market to attribute the value to shareholders offered now by this sale (if at all)."

Giffney said the company has been hindered at times by its bigger shareholders who "openly expressed their preference not to inject new funds," which at times "would have made sense."

The board had "differing views on many of these issues" but agreed on "the material matters affecting Renaissance," he said.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6665 -0.0004 -0.06%
AUD 0.8945 0.0027 0.30%
EUR 0.6055 0.0017 0.28%
GBP 0.4310 0.0035 0.82%
HKD 5.1684 -0.0019 -0.04%
JPY 81.6260 -0.1330 -0.16%

Commods

Commodity Price Change Time
Gold Index 1152.6 -17.510 2015-07-07T00:
Oil Brent 57.4 -3.220 2015-07-07T00:
Oil Nymex 52.4 0.230 2015-07-07T00:
Silver Index 15.0 -0.793 2015-07-07T00:

Indices

Symbol Open High Last %
NZX 50 5804.6 5811.4 5803.2 0.00%
NASDAQ 4993.8 5002.0 4991.9 0.11%
DAX 10930.0 10946.9 10890.6 -1.96%
DJI 17684.9 17793.5 17683.6 0.53%
FTSE 6535.7 6543.8 6535.7 -1.58%
HKSE 25391.8 25439.3 25236.3 -1.03%
NI225 20282.5 20310.9 20376.6 -0.91%