N Brown Group PLC (AIM:BWNG), owner of the online clothing stores Jacamo and JD Williams, has received a takeover offer from a family with two members on its board.
The offer, made at 40p per share by a vehicle owned by non-executive director Joshua Alliance, represents a premium over the last closing price of 27p and the average price of less than 20p over the past year.
Valuing the group at £191 million, the offer from Joshua Alliance has been backed by his father, Lord David Alliance, who is also a non-executive board member and owns 33.41% of the company.
With Joshua's 6.6% stake, the family forms a 'concert party' that, along with other family members, owns 53.4% of N Brown shares.
N Brown's independent directors intend to recommend the cash offer unanimously.
A share alternative has been proposed alongside the cash offer, allowing eligible shareholders to elect to receive one unlisted share in the Alliance's 'Bidco' vehicle for each N Brown share they hold.
Interim chair and CEO Steve Johnson, along with finance chief Dominic Appleton, have agreed to opt for the share alternative for all their current holdings in N Brown.
The Alliance family alliance
Joshua Alliance said he supports the current management team but believes N Brown’s AIM listing adds costs without significant benefits due to low trading liquidity and limited investor interest.
By taking the company private, he said the company would be better able to accelerate its long-term growth potential, including via "additional capital, expertise and resource".
He believes that the retailer "is better able to achieve its growth potential as a private company than as a public company, taking into account the dynamics of the markets in which N Brown operates, and the broader competitive landscape".
Alliance Jnr joined N Brown’s board in December 2020, having been with the company since 2014, three years after graduating from university, where he held roles including head of business innovation for JD Williams.
His father, Lord Alliance, co-founder of FTSE 250-listed thread manufacturer Coats Group PLC (LSE:COA), was appointed a director and chairman of N Brown in 1968, but stepped down as chair in 2012.
Shares in N Brown jumped 43% to 38.5p on Thursday morning.