In a statement to the stock exchange late on Monday 9 April, Godfreys revealed that Arcade Finance, its largest shareholder, had lodged a full takeover bid.
Cowell Clarke Commercial Lawyers, acting on behalf of Arcade Finance, put forward a submission, including a letter by Arcade Finance’s director, John Johnston. Mainstream media were quick to note Mr Johnston’s age – reportedly 99 years.
“I co-founded Godfreys with Godfrey Cohen in the 1930s. Since then, I have been a strong supporter of Godfreys,” Mr Johnston wrote as part of the takeover bid.
Mr Johnston said that his offer of $0.32 per share “is a highly attractive one and represents compelling value for Godfreys shareholders … represent[ing] a significant premium of 52.4 per cent to the closing price of Godfreys shares on 6 April 2018, being the last trading day before the announcement date”.
The Godfreys board has advised shareholders not to act on the bid until it fully investigates the “unsolicited offer”.
“The Directors will carefully consider the proposal by Arcade as announced,” the company said.
More information is expected over the coming days.
Godfreys reported a substantial slump in earnings and like-for-like sales at its half-year update on 20 February this year, with comparable store sales falling 6.2 per cent and after-tax profit tumbling 61.8 per cent to $900,000.
The retailer, which has more than 220 stores nationally, including around 100 franchised stores, sells a range of household vacuum cleaners, steam cleaning and shampoo cleaning machines and associated accessories, in addition to offering repair services.
According to the Godfreys website, Mr Johnston was just 19 years old when he co-founded the retailer in Melbourne in 1936.