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Pacific Brands in takeover talks with KKR

Tuesday 10th January 2012 1 Comment

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Pacific Brands, whose clothing labels include Jockey underwear, has confirmed it is in takeover talks with KKR after reports that the buyout firm has made an offer worth about A$600 million.

Pacific Brands “has received an unsolicited approach from KKR regarding a possible acquisition of the entire issued capital of the company,” the Melbourne-based company said in a statement.

The company’s board and advisers Flagstaff Partners and Minter Ellison are “considering the approach and preliminary discussions are being held with KKR,” it said.

KKR wrote to the board of Pacific Brands before Christmas and there was no certaintya deal, worth about A$600 million, would proceed, the Australian Financial Review reported.

Shares of Pacific Brands have fallen 43 percent in the past 12 months and were last at 56 Australian cents on the ASX, valuing the company at A$511 million. The stock is rated ‘outperform’ based on the consensus of 16 recommendations compiled by Reuters.

The company reported a net loss of A$131.9 million last year, reflecting impairments and restructuring costs in what it called an “increasingly tough retail market.” Profit before items rose about 15 percent to A$103 million.

The company’s clothing and bed-linen brands include Berlei, Bonds, Clarks, Dunlop, Everlast, Grosby, Hard Yakka, Holeproof, Hush Puppies, King Gee, Mooks, Mossimo, Razzamatazz, Sheridan, Slazenger, Tontine and Volley.

The newspaper said Pacific Brands, a clothing wholesaler, would be open to a return to private ownership because of the pressure of complying with being a publicly traded firm.

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Comments from our readers

On 11 January 2012 at 10:10 am Stewart said:
the present owners have almost driven some of these brands into the ground by foolish, non-retail customer focused marketing practices (just try to obtain extra pillowslips (other than Euro size) in New Zealand, and has anybody sensible compared the prices of Jockey womens underwear with comparative other offerings? Its a real pity that Equity funds take over such concerns: bean counters have no knowledge of how to run a retail business in today's climate. More should listen to people like Ms Portas in the Uk
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