N Brown to be taken private by Joshua Alliance in £191m deal, shares surge

N Brown said on Thursday that it has agreed to be taken private by a company owned by Joshua Alliance - whose family has been involved with the group since the 1960s - in a £191m deal.

The JD Williams, Simply Be and Jacamo owner said Falcon 24 Topco Limited, a newly-formed company owned and controlled by Joshua Alliance, has agreed to pay 40p per share in cash, which is a premium of about 48% to the closing share price on Wednesday.

Joshua Alliance, a non-executive director of N Brown, already owns a 6.6% stake in the group, while the Alliance Family owns 53.4%. His father, Lord David Alliance, is also a non-executive director.

Falcon 24 Topco said that "in light of N Brown's current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefitting from being listed on the AIM market, whilst having to bear significant costs associated with its listing".

It added: "Bidco believes that it can support N Brown in accelerating its long-term growth potential, and that it can provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business."

Steve Johnson, interim executive chair and chief executive of N Brown, said: "N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business. We continue to deliver on our strategy for growth, enabled by a sustainable and efficient operating model, and supporting our people and talent.

"Today's announcement from Bidco will enable us to accelerate that strategy for the benefit of all our stakeholders. The N Brown independent directors are therefore unanimously intending to recommend it to our shareholders."

Joshua Alliance said: "My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business. I am delighted to continue that history. This transaction will support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.

"In the business' current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets. I am excited about the opportunities created by this portfolio of well-established fashion brands, supported by an innovative financial services platform and its talented executive team and employees."

At 0950 BST, the shares were up 43% at 38.54p.

Russ Mould, investment director at AJ Bell, said: "N Brown has had a difficult time on the stock market over the past 10 years, losing a significant amount of value. It has struggled with fierce competition, tired brands, legal issues, over-estimating the opportunity for plus-sized fashion and for a while seemed to make more money from interest on customer credit than it did from selling clothes.

"Many investors gave up on the stock a long time ago so it’s a surprise N Brown has lasted this long as a listed entity."