By Jack Mendel
The board of MySale has urged shareholders accept Frasers’ bid even though the it “undervalues” the company.
The Sports Direct owner Frasers would expect to own 504,113,926 MySale Shares or more than 48 per cent of the voting rights, if the deal went through.
Last month, MySale shareholders rejected a 2p-per-share takeover bid by Frasers on the grounds that it undervalued the firm.
In a statement issued today, MySale’s board said it “continues to unanimously believe that the offer undervalues the Company and its future prospects” but due to Frasers’ interest, “the Board is now recommending that MySale Shareholders accept the Offer.”
It added that Frasers’ owning 48.48 per cent means it will be “able to exercise significant control over” the firm, including being “able to pass and/or block resolutions”, such as the appointment of directors.
It warned that “the significantly reduced free float in the MySale Shares following the Offer will further reduce the liquidity” in the shares. “The Board believes that it could be very difficult for a MySale Shareholder who does not accept the Offer to sell and monetise their shareholding..without having a material impact on the price of MySale Shares”.
MySale’s Board said it is therefore the “best opportunity for MySale Shareholders to realise value for their Shares in the foreseeable future, if they wish to do so”.
Its Board added it has been advised by Singer Capital Markets, which “now unanimously recommends that MySale Shareholders accept the Offer.
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