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Kathmandu launches $3m cost recovery bid

Outdoor clothing retailer Kathmandu is trying to recover $3 million in costs linked to the Briscoe Group’s failed takeover bid.

Jun 08, 2016, updated Jun 08, 2016

Kathmandu has lodged a claim in the New Zealand High Court to recover expenses, including legal fees and tax advice, which it says it is entitled to under the New Zealand Takeover Code.

Chief financial officer Reuben Casey said the legal action was standard process in NZ.

“The board had to take the appropriate steps to fully advise shareholders of the merits of the offer and under the NZ takeover code the company that launched the takeover incurs those costs,” he said.

Briscoe has already paid almost $NZ638,000 on May 25, however Kathmandu says it is also entitled to $NZ2.7 million ($A2.5 million) and $A446,400.

Kathmandu is expecting a full-year profit of $NZ30.2 million after returning to a first-half profit of $NZ9.4 million earlier this year.

The company successfully fended off a takeover bid from New Zealand retailer Rod Duke’s Briscoe Group in 2015.

The unsolicited takeover bid, described as aggressive, was launched last June, when Kathmandu’s share price was taking a beating following sluggish sales and profit downgrades.

Briscoe, at the time, increased its stake in the company to its current holding of nearly 20 per cent.

Kathmandu’s shareholders rejected the cash-and-scrip offer, worth about $NZ350 million, in September after the company advised against it, saying the offer undervalued the company.

Kathmandu is now targeting international expansion after its first half-year profit rebound.

A comment from Briscoe has been sought.

-AAP

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