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Ron Brierley makes takeover offer for cashed-up Kirkcaldie at $2.75 a share

Friday 26th February 2016

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Veteran corporate raider Ron Brierley has made a takeover offer for cashed-up retailer Kirkcaldie & Stains, suggesting he sees more value than the company's own assessment of its residual assets.

Brierley's Mercantile NZ Ltd vehicle is currently the fourth-largest shareholder in Kirkcaldie, with a 9.9 percent stake. He intends to offer $2.75 cash a share for the rest of the company, a premium on the $1.65 he last traded the shares at and above the $2.20 a share he paid to increase his stake in late 2015.   

Notice of the takeover came just minutes after Kirkcaldie advised the stock exchange that it had completed its cancellation of four in every five shares, shrinking total stock outstanding to 2.05 million from 10.25 million. The company intends paying $2.3602 per cancelled share next Monday, returning about $19.4 million to shareholders via a scheme of arrangement following the sale of its name and the lease to its Lambton Quay premises to Australian department store chain David Jones.

This week, Kirkcaldie said its residual value is expected to be $3.18-to-$3.67 a share once it has completed the capital return, which is based on estimated remaining net assets of $6.5 million to $7.5 million.

Kirkcaldie chairman Falcon Clouston told shareholders at their annual meeting this week that the residual value was dependent on the company's ability to dispose of its remaining leases for sites in Petone, Thorndon Quay and Brandon Street, sale of remaining stock and no warranty claims arising from its agreement with David Jones. There was also a possibility of selling the listed shell company for use as a backdoor listing.

Brierley's offer is conditional on Kirkcaldie making no dividend, bonus or other payments or distributions and on Mercantile gaining acceptances for more than 50 percent of the stock.

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