Hong Kong fashion retail group I.T has revealed a plan to delist, with a buy-out offer from founder Sham Kar Wai and private-equity investor CVC.
Under the proposal the bidders would offer shareholders HKD3 (US 39 cents) a share, representing a 54.6-per-cent premium on the trading price on November 30 when trading was suspended pending an announcement.
The transaction is valued at US$168.37 million.
If shareholders approve the deal, Sham’s stake in the business will drop from 63.61 per cent to 50.65 per cent with CVC holding the balance.
The company said in a stock-exchange filing on Sunday that the proposal would allow the business to be transformed amid what it described as “challenging market conditions”.
Shareholders would have the opportunity to realise their investment unaffected by the risks of the planned restructure. At the same time, by taking the company private, I.T’s owners would be spared the pressure of expectations of shareholders to achieve rapid turnaround results.
Trading in I.T’s shares resumed Monday.
I.T has struggled in recent months as the advent of Covid-19 saw inbound tourism to Hong Kong evaporate. In October the company warned shareholders it would post a loss of at least US$38.7 million for the six months to August.
I.T Group operates its own brands, including Chocolate and 5cm, concept stores Izzue and Double-Park; international brands it has local licences for including Kurt Geiger and Camper; and A Bathing Ape, which the company rescued from Japanese owners in 2011.
While the company’s share price has risen by about 3.7 per cent this calendar year, it fell by about 55 per cent last year.