Ailing Pacific Brands backs away from takeover talks
Company says it is now "well placed to deal with the challenges ahead of it and then to benefit from any improvement in market conditions".
Hot Topic
Long reads
BUSINESSDESK: Pacific Brands, which wrote down its ailing underwear business by $A388.7 million in February, has backed away from a takeover bid after holding early talks with at least two prospective suitors.
The Melbourne-based company, which owns the Stubbies, Berlei, Bonds, Dunlop and Sheridan clothing brands, received an unsolicited offer from US private equity firm KKR in January that reportedly valued the manufacturer at $A600m, a price dubbed "opportunistic" by fund manager Will Seddon of White Funds Management in Sydney at the time.
Pacific Brands had subsequent approaches in February.
"Having explored these inquiries, the board of Pacific Brands has concluded that a definitive proposal for the acquisition of the entire issued capital of the company is unlikely to be forthcoming in the near term," the company said.
"Due to the transformation and restructuring work completed, the company remains well placed to deal with the challenges ahead of it and then to benefit from any improvement in market conditions."
Pacific Brands has been owned by private equity firms before – CVC Asia Pacific and Catalyst Investment Managers took the company public in 2004, having acquired the business in 2001.
The manufacturer affirmed full-year pretax earnings guidance of between $A125m and $A130m, as it reduces its range of brands and invests in business-to-business and direct-to-consumer channels.
The company posted a loss of $A362.4m in the six months ended December 31 after writing down the value of its underwear business amid a 20% slump in sales.
Pacific Brands dual-listed shares, which trade mostly on the ASX, closed yesterday at 62 Australian cents.
On the NZX, the stock was unchanged at 75 cents.
Paul McBeth
Tue, 15 May 2012
Tue, 15 May 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Ailing Pacific Brands backs away from takeover talks
20720