A bid by Mike Ashley's Frasers Group PLC (LSE:FRAS) for Mysale Group PLC (AIM:MYSL) has been rejected by the Australian online fashion marketplace.
Last month, the Sports Direct (LON:FRAS) owner made a cash offer of 2p per share for the AIM-listed outfit, which amounted to £13.6mln for the shares it did not already own.
Frasers, which bought a stake of nearly 29% in June, said the offer was at a premium to the share price before it bought its stake, although the shares had been at 8p a year ago and were just below 6p at the start of the year.
MySale pointed out that the offer price, which Frasers said it would not increase, was a 53% discount to its average closing price of 4.26p over the past 12 months before the offer was made.
As such the directors recommended its shareholders reject the offer, saying it "does not reflect an adequate value or premium" and undervalues MySale and its prospects, that the financial terms are not considered "fair and reasonable".
The Australian company provided an update on its recent trading, saying that it has made progress in growing the number of sellers on its marketplace, which is its largest channel, underpinned by the higher margin own-stock and order after sale channel.
For the 8 weeks to 30 August, its gross merchandise value was approximately 34% and statutory revenue 45% below the prior year period, which is said was a result of pandemic related lockdowns in Australia and New Zealand in the previous corresponding period and continuing macro-economic headwinds.
Gross margins have remained stable at roughly 29%, which MySale said resulted in it trading profitably and on a cash flow positive basis, as a result of cost cutting.