Moss Bros to go private in £22.6m cash deal

Moss Bros has agreed to be bought for £22.6m in cash by a group of private investors led by Menoshi Shina, the US-based owner of Crew Clothing.

The UK clothing retailer and formalwear specialist's board has accepted an offer of 22p a share - a 61% premium to the company's closing share price on Wednesday.

The offer is 30.2% higher than the average closing price for the past month and 10.6% more than the closing price over the past six months.

Shina, known as "Michael", has teamed up with Anna Kentros, Grace Hutcher, and David Shalleck-Klein to buy the venerable UK company, founded in London's Covent Garden in 1851.

The investors said taking Moss Bros private would give it room to improve its business and cut procurement costs. The bidders said they would close a maximum of five stores net of openings and that there would be no job cuts aside from store closures.

The business will also benefit from investment in its online operations and cutting costs related to being a public company, the bidders said. Chief Executive Brian Brick and Chief Financial Officer Bill Adams will stay on.

Shina said: "We believe that Moss Bros can have a bright future in the private arena and are excited to contribute our expertise and assist in delivering the current strategy. We see the acquisition as an opportunity to partner with an excellent management team to improve Moss Bros' financial performance and protect its heritage, brand and presence on the UK high street."

Moss Bros shares rose 47% to 20.10p, suggesting investors do not expect a counter-bid.

Moss Bros said its business was on the right track but that weak consumer confidence, shifting shopping habits and the coronavirus outbreak made the necessary investment difficult as a public company.

"The board of Moss Bros believes that, with potential access to additional private capital, it will be possible to invest behind new initiatives faster and more flexibly," the company said.

Nick Burchett, a fund manager at Cavendish Asset Management who holds Moss Bros shares, said: “This is a well-timed if opportunistic bid … and the sharp fall in the market has certainly helped them pick this up cheaply. But with little relief for the high street from the chancellor yesterday and the ongoing supply chain risk from the coronavirus, you have to wonder how wise this acquisition is at this time.”

The deal will require the approval of at least 75% of shareholders at a general meeting.