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Shares of Jacques Vert PLC (LSE:JQV) rose 66% to 20.75 pence at the close of trading following the announcement released earlier today of an agreement to sell 2,383,465 or 1.2% of Jacques Vert’s ordinary share capital to Minerva Bidco at 21 pence a share, a 68% premium based on the closing price of 12.5 pence on December 16, 2011.
The Sale Offer
According to the press release, Minerva Bidco will purchase all issued and to be issued ordinary share capital of Jacques Vert valued at approximately GBP41.2 million. Minerva Bidco has secured a loan from the Bank of Montreal by entering into a loan authorisation agreement to finance the offer.
The Buyer, Minerva Bidco
Minerva Bidco is a wholly-owned subsidiary of Minerva Holdco, an affiliate of Sun Capital Partners, newly created for the purpose of securing the sale. Sun Capital Partners is a private investment firm holding about $8 million of capital under management geared toward leverage buy outs, equity, debt, and other investments in market-leading companies.
Established in 1995, Sun Capital has invested in more than 280 companies from various industries around the world through its offices in New York, California, and Florida, in the United States, together with its affiliates in the United Kingdom, France, Germany, Luxembourg, and China.
Perceived Benefits from the Sale
As released from the statement, the acquisition of Jacques Vert will provide an opening for Sun Capital in the classic women’s wear segment of the retail industry in the United Kingdom,Ireland, and Canada where the brands are being marketed and further add to their portfolio of retail and apparel companies. Sun Capital intends to merge Jacques Vert with Irisa Group, a recently purchased company also specialising in ladies clothing.
According to the press release, the Board of Minerva Bidco is of the opinion that Jacques Vert will be more profitable if it were a privately held company; hence, upon purchase, they will cease trading in AIM and re-register the company as a private entity.
On the part of Jacques Vert, the Board believes it is more practical to sell the company given the uncertainty in the current economic conditions, the statement said. While they believe that the company is strong, they perceive that the offer to sell the whole of their investment in cash, at the agreed value, is beyond what the company can gain in the short and medium term and therefore, an attractive realisation of the shareholders’ investment, the announcement stated.
Impact on Existing Jacques Vert Corporate Structure
Minervo Bidco acknowledges that the company cannot ascertain all the implications of the sale will be with regard to the management and employees of the Jacques Vert. The former admits that changes may be required following the completion of the sale. Nonetheless, there were some conditions that are needed to be met as essential to the sale.
Security of Management and Employees, and Assets
Minerva Bidco guarantees the safeguard of all existing employment rights, including pension rights, of all management and employees of Jacques Vert, in compliance with contractual and statutory requirements. Immediately after the acquisition takes effect, all non-executive directors are to resign from the Board. Places of business and other fixed assets will still be subject to review once Jacques Vert is acquired.
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