Shares in Superdry PLC (LSE:SDRY) soared over 110% on the back of a spate of takeover rumours that later led to founder and chief executive Julian Dunkerton confirming he was mulling buying the business back.
Dunkerton has requested permission from the company’s chairman to explore an offer for the company and is in talks with potential financing partners, with a cash offer for the company among the possibilities.
He has until March 1 to make an offer or walk away, the company said.
An earlier newspaper report said a hedge fund had taken a 5% stake as it sees the clothing retailer to be a likely bid target.
Norway-based First Seagull has bought a 5.3% stake in the Cheltenham-based retailer, The Times reported, citing regulatory filings.
The paper said it understood that the alternative investment fund considers Superdry to be ripe for a bid after a series of profit warnings over the past year had driven down its share price.
Whether First Seagull is talking with Dunkerton is not clear.
Seagull, run by fund manager Stian Husvaeg, who previously worked as an analyst at Norges Bank Investment Management and Morgan Stanley (NYSE:MS), seeks "situations others avoid", looking for mispricing that "tends to arise when businesses face potentially structural challenges and [...] indiscriminate selling".
Sycamore Partners, an American private equity company, and Authentic Brands Group, which owns Ted Baker and Forever 21, are also said to have Superdry on their radars, the Times report said.
Sources cited by the paper suggested that the value of Superdry owned by a brand management company would be about £400 million to £600 million, compared with its present market cap of about £34 million.
Shares in the faux-Japanese brand, which fell to all-time lows below 20p last month, down over 90% in the past two years, rose 118% to 46.1p by mid-morning on Friday.
At their peak in early 2018, the company’s shares were just shy of £20, giving it a valuation above £1.7 billion.
The firm has struggled in recent times and reports this week said the firm is looking at cutting costs which could include store closures.
-- adds Dunkerton angle--