Accent Group rejects Frasers' takeover proposal

Australian sports footwear and apparel retailer Accent Group has formally rejected a takeover proposal from its largest shareholder, Frasers Group, with its independent board committee urging shareholders not to accept the offer. The committee, comprising all directors except one, described the proposal as "unsolicited and highly opportunistic," arguing that it significantly undervalues the company and its future growth prospects.

Frasers Group has offered 0.65 Australian dollars per share in an on-market bid valued at approximately 390.8 million Australian dollars. While the offer matched Accent Group's closing share price before the bid was announced, investor sentiment appeared more optimistic, with the stock rising above the offer price to close at 0.74 Australian dollars on Friday. According to the board committee, the proposal failed to reflect the value expected to be created through Accent Group's long-term 2030 growth strategy. Directors also noted that the bid comes at a time when Australia's discretionary retail sector is experiencing a cyclical downturn, which they believe has temporarily depressed the company's market valuation.

The committee further pointed out that Frasers has previously acquired Accent shares at prices higher than its current offer, reinforcing its view that the bid does not represent fair value. Directors also argued that Frasers is attempting to strengthen its influence over Accent Group, including its Sports Direct ANZ operations, without offering shareholders an appropriate control premium. Shareholders were also cautioned that accepting the current on-market offer could prevent them from benefiting from any higher or competing proposals that may emerge in the future.

Accent Group asserted that its independent directors remain committed to acting in the best interests of shareholders and continue to recommend rejecting the current takeover offer.