The Board of N Brown Group have recommended a £191m takeover bid from non-executive director, Joshua Alliance.
The Manchester-based ecommerce group said it had reached an agreement with Falcon 24 Topco Ltd, which is owned and controlled by Joshua Alliance.
The bid would be to acquire the entire share capital of N Brown in cash. Joshua Alliance currently owns or controls 6.6% of the company’s shares. In addition other members of the Alliance Family Concert Party had an interest in approximately 53.4% of N Brown’s issued share capital.
Joshua Alliance has been on the N Brown board since 2020. The son of its former Director and Chair, Lord Alliance, Joshua was previously Head of Business Innovation for J.D. Williams.
“My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business. I am delighted to continue that history,” he said.
“This transaction will support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business. In the business’ current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets. I am excited about the opportunities created by this portfolio of well-established fashion brands, supported by an innovative financial services platform and its talented executive team and employees.”
As Alliance stated above, Falcon 24 Topco doesn’t believe that N Brown should remain listed:
“Bidco believes that, in light of N Brown’s current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefitting from being listed on the AIM market, whilst having to bear significant costs associated with its listing.”
It added that the acquisition “presents an opportunity to acquire a portfolio of well-established fashion brands, supported by an innovative financial services platform that is currently under development, with a long history and heritage in the UK clothing and footwear market.”
The company further stated that it could “support N Brown in accelerating its long-term growth potential, and that it can provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.”
The current executive team and leadership would remain in place.
The board explained that it was supporting the acquisition for a number of reasons, including the “challenging” market and retail environment and requirement for additional funding to ensure that it’s “set up for future growth.”
“N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business. We continue to deliver on our strategy for growth, enabled by a sustainable and efficient operating model, and supporting our people and talent,” explained Steve Johnson, Interim Executive Chair and CEO of N Brown.
“Today’s announcement from Bidco will enable us to accelerate that strategy for the benefit of all our stakeholders. The N Brown Independent Directors are therefore unanimously intending to recommend it to our shareholders.”
The group is currently reviewing its operating costs, so that it is “right-size” to be both efficient and sustainable. This has meant a number of roles being put at risk of redundancy, including 105 which are proposed to go by the end of this month – 98 in its head office and 7 within its supply chain hub.
The acquisition is expected to go through in the first quarter of next year.
