Troubled fashion chain Bonmarché has warned that trading in the first quarter has been “poor” and reversed its opposition to the £5.7m takeover offer from UK billionaire Philip Day.
Blaming poor weather, the chain said that it was also possible that its losses could be greater than the £5-£6m it was expecting.
This made the terms of the offer from Mr Day more acceptable.
The Yorkshire-based chain has 312 shops with clothing aimed at the over-50s.
It employs 1,900 full-time equivalent people and Edinburgh Woollen Mill Group-owner Mr Day has previously warned he expected a “material reduction” in headcount at the chain.
Through his Dubai-based investment vehicle Spectre, Mr Day made a mandatory takeover bid in April after buying a 52.4% stake in the retailer.
The offer is at 11.445p per share and the shares were trading on Tuesday, before this announcement, at 15p.
The board of Bonmarché says the offer “does not adequately reflect the potential longer-term value of the business”.
But it adds that “the increase in uncertainty that has developed, reflecting the trading and financial position of the business during the first quarter of the financial year, makes the certainty represented by the offer potentially more attractive in the short term”.
The terms of the offer are “now fair and reasonable”, the company said.
“The board believes that once the near-term has been weathered, the medium and long-term prospects for the Bonmarché business are good,” it added.
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