Struggling Hong Kong apparel retailer I.T’s top shareholder, private equity firm in bid to take firm private
- The offer price of HK$3 per share represents a 54.6 per cent premium to the last traded price of HK$1.94 on November 30
- I.T reported a net loss of HK$337 million for the six months ended August 2020, a 373 per cent jump from HK$71.2 million a year ago
The majority shareholder of apparel and accessory retailer I.T has teamed up with a private equity fund to privatise the company amid mounting losses because of the Covid-19 pandemic and in spite of restructuring efforts to improve its competitive advantage with a bigger online presence.
“While the company has adopted online strategies, it has been unable to transform business operations sufficiently for online growth and related cost savings measures to offset a decline in sales from retail outlets,” the company said in a joint announcement with Brooklyn Investment, a wholly owned unit of private equity firm CVC Funds, to the Hong Kong stock exchange on Sunday.
Under the privatisation proposal, the shares held by the Founder Group, whose shareholders include the two brothers, will be cancelled. A cancellation price of HK$3 per share will be paid in cash to holders of 435.2 million shares held by investors other than the Founder Group, representing a 36.4 per cent stake in the company. Kar floated the firm on the stock exchange in March 2005.
The offer represents a 54.6 per cent premium to the I.T’s last traded share price of HK$1.94 on November 30 when trading in the shares was halted, pending this announcement. Trading in the shares resumes on Monday..