Fashion retailer French Connection Group (LSE:FCCN) PLC has agreed a takeover bid worth £28.98mln from a MIP HoldingsLtd, a consortium of clothing entrepreneur and major shareholder Apinder Singh Ghura, Amarjit Singh Grewal and KJR Brothers Ltd.
French Connection chairman Stephen Marks, who founded the business in 1972, said he would now step down from the group.
News of the 30p a share bid followed an announcement on 23 September that French Connection was in bid talks. The price is at a 30% premium to the closing price of 23.1p on the day prior to the possible offer being announced.
The struggling retailer announced a strategic review in 2018 after years of losses and began looking for a buyer earlier this year after revenues plummeted as a result of the pandemic.
Singh Ghura already owns 25.4% of French Connection, while Marks has a 39.1% stake.
"We are pleased to have reached an agreement with the French Connection directors on this recommended acquisition. We are looking forward to working with French Connection's management to execute and implement MIP's strategic plans to facilitate the future growth and profitability for the business," said Singh Ghura.
Marks said French Connection has made “significant” progress in its plans to rationalise its store portfolio and to return the company to profit over the last five years.
“It was always our intention to look at the most appropriate ownership structure for the business once it was back on track, and, having conducted a formal sale process, the French Connection Board has concluded that the offer being made by MIP is fair and reasonable,” he said.
Shares were 18.75% higher at 28.50p late morning.