(Reuters) -Superdry CEO and top shareholder Julian Dunkerton will not be making an offer for the company, both parties said on Thursday, and the struggling British fashion chain said it reached an agreement to extend a loan facility to help its turnaround plans.
Dunkerton, who holds a 26% stake in the company and is a co-founder, had been in talks with Superdry over several options, including a possible cash offer for the shares he does not already own.
While a bid has been shelved for now, the company, known for jackets and clothing inspired by American vintage styles and Japanese graphics, said alternatives remain open as it works on cost-saving options to combat weak demand and a cash crunch over recent months.
“The company remains in discussions with Julian Dunkerton in respect of alternative structures, including a possible equity raise fully underwritten by Julian Dunkerton,” Superdry said.
Dunkerton said that any equity raise would be expected at a “very material discount” to Superdry’s current share price.
Dunkerton and Superdry, which issued identical statements on the decision to not pursue a bid, expressed confidence that a takeover offer was “unlikely to deliver an outcome for shareholders, or stakeholders more broadly,” which existing efforts by the company could not.
The retailer on Thursday separately said it agreed to an extension of six months and an increase of up to 20 million pounds ($25.3 million) to its secondary lending facility with Hilco Capital.
The company also said that Giles David, who was named interim finance chief in January, will join its operational board to aid these plans and other discussions with Dunkerton.
Shares of Gloucestershire-based Superdry closed down about 5% on Thursday before the announcements, and have lost about 16% so far this year.
The firm in January had warned that it does not expect market conditions to improve in the near term after a tough Christmas season.
($1 = 0.7917 pounds)
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Devika Syamnath and Leslie Adler)
