Wednesday 14th September 2011
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Shares in Renaissance Corp., the electronics and computer retailer, surged 18% after the company said it had received an approach to buy its distribution business.
The Auckland-based company said in a statement today that it hadn't yet received a formal offer for its Renaissance distribution arm, which accounted for about 56% of the group’s $102 million of sales in the six months ended March 31.
"The board of Renaissance has determined that if it received a proposal at the right price it would entertain the sale of the business," chief executive Richard Web said.
He noted that under normal circumstance the board would not comment on the offer without an official proposal, but felt compelled to do so this time as a representative from another potential buyer was "given this information in confidence and now claims to be in the possession of inside information".
If the sale of the distribution business goes ahead, Renaissance would operate the Natcoll/Yoobee Education business and Yoobee retail, which would "substantially" reduce its capital requirements.
The company has struggled to find its feet after the building that housed its Natcoll Christchurch Campus and head office was condemned after the Christchurch earthquake in February, and it faced increased competition after losing the sole rights to sell Apple computers in New Zealand.
The company expects to make a pre-tax loss of up to $4 million in the 12 months ending Sept. 30, booking a $2.7 million charge on the Christchurch quakes and cutting gross margins by $1.5 million after the new Apple competitor, Ingram Micro New Zealand Holdings, entered the market last year.
The shares rose 2 cents to 13 cents on the NZX today, valuing the company at $5.9 million.
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