French Connection review outcome delayed to September, sale talks continue
today Jun 28, 2019
French Connection had news about its strategic review and formal sale process on Friday. But unfortunately, it wasn't the kind of news that grabs headlines. Instead, the company said that the review/sale process will go on for a bit longer rather than being concluded by now.
To recap, in case you'd missed it, in October last year, the under-pressure retailer announced that it was “reviewing all strategic options in order to deliver maximum value for its shareholders.” That included it seeking offers from interested buyers and it said at that it had already started preliminary talks “with several interested parties” as well as having had “conversations” with several others. The whole process had been expected to conclude “during the first half.”
Well, the first half finishes on Sunday and while "discussions have progressed,” nothing concrete has come out of it all yet.
French connection said Friday that “the board has extended the period for completing the strategic review and formal sale process until the time of the interim results, which are expected to be published on or about 17 September.”
And it added that it continues to believe that it “can deliver long-term growth and remains focused on building on the momentum achieved last year and driving the business forward.”
The company has dropped no hints about who it might be talking to and whether the “interested parties” include acquisitive entrepreneur Mike Ashley, who already owns a substantial stake in the retailer.
The delay is perhaps no surprise. French connection may have seen slightly improved performance in the year to January 31, but times are still tough and many of its retail peers have reported difficult trading in 2019. Negotiations over the sale of companies that are not at the top of their game can be protracted as interested bidders seek to buy them at the lowest possible price while the board works to get the highest price it can.
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