French Connection has revealed that a Newcastle-based entrepreneur is leading a £29m pitch to buy it out.
Shares in the fashion chain shot up nearly 15% on Thursday to 26.5p, giving it a market value of about £25m, after the company announced in a statement to the stock market that Apinder Singh Ghura had teamed up to make a bid for it with business partner Amarjit Singh Grewal and KJR Brothers Ltd.
Ghura, who spent years in the clothing industry before shifting into other investments including property and care homes, bought a 25% stake in French Connection from Sports Direct boss Mike Ashley in February.
“I like to invest in things I understand and clothing is something I have been doing for a long time. To me this is a good investment and a good brand,” he said at the time.
French Connection said in March it was conducting a formal sale process but no bid emerged from two potential suitors – Spotlight Brands, which had backing from the restructuring and investment firm Gordon Brothers, or Go Global Retail.
The fashion company said talks with the latest bidding consortium over a potential 30p a share approach might not result in an offer for the company. It said it had alerted the stock market about the talks without the consent of the bidding group.
“Discussions with the consortium remain ongoing. Accordingly, there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made (although any offer is likely to be in cash),” French Connection said.
French Connection, was founded by its current chairman Stephen Marks in 1972. It owns the Great Plains and You Must Create (YMC) brands, operates 67 stores and concessions in the UK, and has a further 161 locations operated under franchise and licences. It employs about 780 staff.
The three members of the buying consortium bought the Bench fashion brand together in March this year.