Bonmarche rejects billionaire Philip Day's £5.7m takeover bid

Bonmarche has rejected a £5.7m takeover bid from retail billionaire Philip Day earlier this month.

The clothing retailer said on Friday that the bid "materially undervalues" the group and its future prospect.

On 2 April, Day - who owns Edinburgh Woollen Mill - bought 26 million shares in Bonmarche through his Dubai-based investment vehicle Spectre Holdings, taking his stake in the company to 52.4% and triggering a mandatory takeover bid under City takeover rules. Bonmarche said at the time that it was considering the offer.

The offer price of 11.445p a share in cash was well below the previous closing price of 18p.

Bonmarche, which advised its shareholders to take no action in relation to their shares, said it has sought to engage with Day to discuss the future plans for the business for the benefits of all stakeholders.

"The board continues to seek positive engagement with Philip Day and looks forward to discussions in due course," it said.

In addition, the company said that in light of fourth quarter trading and prior to the mandatory cash offer, it had been planning a number of cost reduction actions across the group, which it expects to start implementing shortly.

At 0845 BST, the shares were up 3.3% at 15.50p.