Australia’s Takeovers Panel – which reviews business takeovers across Australia – has declined to launch proceedings over Accent Group’s initial reasons why its shareholders should reject UK company Frasers Group’s takeover bid.
Frasers had called on the Takeovers Panel for help earlier this month, claiming that Accent’s target statement – which ultimately rejected Frasers’ bid – held arguments that were not soundly based or reasonable.
This comes more than a year after Frasers signed a deal with Accent – the Australian company behind brands such as Hoka, Platypus and The Athlete's Foot – allowing the company to roll out Frasers' Sports Direct business across Australia. Recent reports suggest that Frasers is not happy with the rollout timeline, and appears concerned over how Accent is being run.
One and a half months ago, Frasers decided to launch a takeover bid of Accent Group, with an offer price of $0.65 per share. Accent quickly rejected the bid, telling shareholders to ignore it, and then shared a 70-page target statement outlining why.
After Frasers tapped the Takeovers Panel for help, Accent issued a corrective statement to shareholders, addressing some of the key issues raised by the Panel initially.
That statement – submitted to ASIC by Accent's law firm – shared that the Panel had raised key concerns, specifically around the reasons given for the Independent Board Committee's (IBC) view that Frasers' $0.65-per-share offer is "materially inadequate"; the extent to which the IBC relied on Accent's 2030 Strategic Growth Plan in reaching that view; the discount of the offer price to Accent's 6-month and 12-month volume weighted average prices (VWAPs); and the prices Frasers has previously paid for Accent shares.
The Panel considered the supplementary statement “satisfactorily addressed” its concerns and that Accent shareholders have now been provided with sufficient information to allow them to make an informed assessment of the undervalue statements.
The Panel also accepted an undertaking from Accent to commence and conclude the dispatch of the statement to shareholders as soon as practicable.
“The Panel did not seek to second-guess the IBC’s decision to make the undervalue statements, noting (among other things) the IBC’s submissions that it has considered internal analysis and advice from external financial advisers,” a press release from the Takeovers Panel shared.
“Following the corrective disclosure made by Accent in the FSTS, the Panel concluded there was no reasonable prospect that it would make a declaration of unacceptable circumstances.
“Accordingly, the Panel declined to conduct proceedings.”
Since Frasers launched the bid on July 1, the UK company extended it for another month, through to the end of September. So far, it appears that no material movements in its shareholding of Accent have occurred.