Superdry shares were sharply lower on Tuesday after talks with the group’s CEO about making an offer for the remaining shares he does not already own failed to produce a deal, leaving the company in a precarious position.
Superdry released a statement late on Thursday last week announcing Superdry founder Julian Dunkerton had not made a formal offer for the company. The announcement also alluded to a possible capital raise at a significant discount to current market prices.
“The Company remains in discussions with Julian Dunkerton in respect of alternative structures, including a possible equity raise fully underwritten by Julian Dunkerton, which would provide additional liquidity headroom for the Company’s turnaround plan. It is expected that any equity raise would be at a very material discount to the current share price,” Superdry said in a statement.
The threat of a possible fundraise has sent investors running for the hills and Superdry shares were down around 50% at the time of writing.
“Investors finally had a chance to price in a barrage of bad news from Superdry which was released after the market close last Thursday. The share price slumped by 47% which implies disaster,” said Russ Mould, investment director at AJ Bell.
“Julian Dunkerton has withdrawn his attempt to take the troubled retailer private which means Superdry now faces the prospect of having to conduct a heavily discounted fundraising to stay alive, conditional on delisting the group from the stock market.
“It has secured additional borrowing facilities that come with a chunky interest rate but that’s only going to be a small plaster on a big wound – not enough to save the day.
“Investors now appear to be dumping the stock to get back anything they can, even if it means crystalising a loss. In the absence of someone else throwing their hat in the ring and trying to buy the business, we can probably wave goodbye to Superdry as a listed entity.”
