From humble beginnings during the Depression, and an original investment of $50, Godfreys Group grew into an Australian brand synonymous with vacuum cleaners.
The company, which claims to be the largest vacuum retailer in the world, listed on the Australian Stock Exchange (ASX) in 2014 at $2.75 per share, but increased competition, falling sales and ongoing management reshuffles saw Godfreys share price fall to an all-time low of 21 cents this week.
John Johnston, the 99-year old co-founder of the vacuum cleaner chain launched a takeover bid yesterday, offering shareholders $0.32 cash for each Godfreys share they hold.
In his capacity as a director of Arcade – Godfreys’ largest shareholder – Johnston wrote to fellow shareholders, offering them a “conditional all-cash off-market takeover bid” to acquire all their shares in Godfreys.
Johnston wrote that while he could not be certain about the future value of the company’s shares in the absence of this or any other offer, Arcade’s offer “is particularly attractive in the context of Godfreys’ continued long-term share price decline, 1H18 results and level of debt.”
The co-founder’s proposal also noted Arcade’s intention to remove Godfreys from the ASX official list upon acquisition, “to give Godfreys the best opportunity to restore its value and restore the confidence of its employees, franchises and suppliers with respect to its performance.”
“Arcade believes the restructuring required to restore Godfreys value would best be carried out in a private company environment,” a Godfreys spokesperson told The West Australian.
“The all-cash offer provides an excellent opportunity for the more than 1200 shareholders in Godfreys to realise some immediate value for their shares.”
Godfreys responded to the takeover bid, with a company statement recommending that shareholders take no action “in regards to the unsolicited offer.”
“The Directors will carefully consider the proposal by Arcade as announced. As part of the assessment of the Offer, the Board will be appointing an independent expert to provide an opinion as to whether the Offer is fair and reasonable,” the statement said.
“The Company will provide to shareholders a Target’s Statement within the required period after the release of Arcade’s Bidder’s Statement, which will include the independent expert’s report and the Board’s recommendation on the Offer.
“The Directors will keep shareholders informed of any further developments and will continue to act in shareholders’ best interests to maximise the value attainable from any transaction.”
The takeover offer is expected to open on 24 April 2018 and will close on 24 May 2018, unless withdrawn or extended.