Allensford has extended its on-market takeover offer for discount department store The Reject Shop until 5 March 2019, almost a full month later than the first extension of 6 February 2019, and approximately two weeks after TRS is due to announce first-half results for FY19.
The extension ensures shareholders will be fully informed about the business’s current trading performance when they vote on the proposal.
TRS told investors in mid-January that it expects to report $10.5 million in net profit after tax, but Allensford noted on Wednesday that the company didn’t explain how it came to the figure.
Without knowledge of sales figures, margins and details of any asset impairments, Allensford argued, shareholders cannot make an informed decision about its takeover offer.
“The outlook for retailers continues to worsen and like-for-like sales performance for most retailers has been challenging,” Allensford director Nick Perkins said.
“The TRS board has provided scant details regarding the performance of the company over the Christmas period, [and] shareholders are entitled to be full informed.”
TRS has recommended that its shareholders reject the takeover attempt, calling it an “unsolicited and highly opportunistic, low ball offer,” which undervalues the business and doesn’t account for future growth strategies.
The discount department store’s share price has remained steady since the initial $2.70 per share offer by Allensford in November 2018. It currently sits at $2.79 per share, a little over half of what it was before the business was forced to cut its half-yearly profit guidance by approximately 40 per cent.
The business initially wished to match its 1H18 result of $17.7 million, but was forced to slash expectations to between $10 million and 11 million after the “extremely weak retail environment” caused comparable sales to fall 2.4 per cent over the first 15 weeks of FY19, and a further 3.9 per cent in the following 8 weeks.
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