Superdry co-founder Julian Dunkerton walks away from takeover bid

Responding to an announcement from the chief executive, the retailer said the decision followed a period of engagement between its transaction committee and Dunkerton. It concluded that a takeover offer from Dunkerton for Superdry is "unlikely to deliver an outcome for shareholders, or stakeholders more broadly", that, the transaction committee and Julian Dunkerton are confident can be executed in the context of the company’s ongoing work on its turnaround plan and material cost saving options.

In February, Dunkerton said there were no plans to take the company private, following reports he was considering the move. However the London Stock Exchange statement said the company remains in discussions with Dunkerton in respect of alternative structures,  It said this included a possible equity raise fully underwritten by Dunkerton, which would provide additional liquidity headroom for the company’s turnaround plan. 

It said it is expected that any equity raise would be at a very material discount to the current share price, require shareholder approval of a Rule 9 waiver and be conditional on a de-listing of the company. Superdry added a further announcement will be made as appropriate and there can be no certainty that a transaction with Dunkerton will be agreed. The business also announced that it has agreed an extension and increase to its secondary lending facility with Hilco Capital Ltd. 

The facility will provide the company with improved liquidity headroom necessary to help facilitate the implementation of its turnaround plan and cost reduction programme. The existing asset backed lending facility with Bantry Bay Capital Ltd remains in place. The Hilco Facility is to be extended by six months to 7 February 2025 and will see an additional £10m made available immediately. A further £10m is available for the working capital peak between September and November, subject to the approval and implementation of cost saving measures. 

The interest rate is 11.5 per cent plus the Bank of England base rate on the drawn element. It is covenant-light, with borrowing availability based upon an asset base that is consistent with the company’s current agreements with both lending parties. Superdry also announced that Giles David has joined the main operational board of the business as interim chief financial officer as of 1 April 2024, but not the PLC board, as this stage, which it said is the logical operational approach in light of ongoing discussions of alternative structures and as a result of the Dunkerton announcement.