WELLINGTON, Aug 6 (Reuters) - New Zealand outdoor clothing and equipment retailer Kathmandu Holdings Ltd KMD.NZ said on Thursday a takeover offer from retailer Briscoe Group Ltd BGR.NZ should be rejected because it was too cheap and did not reflect its true value.
Briscoe, which operates homewares and sportswear chains, built up a 19.9 percent stake in Kathmandu and then launched a cash and scrip offer in June equating to NZ$1.80 a share.
But Kathmandu's board in a formal response to the offer said the offer was opportunistic and undervalued the company.
"Briscoe's Offer is manifestly inadequate and does not reflect the value of Kathmandu's shares," said chairman David Kirk in a statement.
He said an independent report valued Kathmandu between NZ$2.10 and NZ$2.41 a share, implying a capitalisation of NZ$423.1 million to NZ$485.6 million ($275.27 million to $315.93 million).
Kathmandu shares closed on Wednesday at NZ$1.71 each.
The company, which has extensive chains in New Zealand and Australia and has started expanding into Britain, has struggled with sluggish sales and thin margins, but said trading has improved in the past three months.
It said it expected a net profit of NZ$20 million for the year to July 31, 53 percent down on the previous because of weak trading in the early part of the year and one-off restructuring charges.
However, it forecast 11 percent sales growth and margin recovery in the current financial year raising operating earnings by 43 percent.
($1 = 1.5370 New Zealand dollars) (Gyles Beckford; Editing by Chris Reese)