Seraphine to be taken over by largest shareholder in £15.3m deal

Maternity wear retailer Seraphine said on Friday that it has agreed to be taken over by its largest shareholder, Mayfair Equity Partners, in a £15.3m deal.

Under the terms of the transaction, Seraphine shareholders will receive 30p in cash for each of their shares. This is a premium of around 206% to the closing share price on Thursday.

Mayfair currently owns just over 21.7m shares in the company, or a stake of 42.7%.

Seraphine chair Sharon Flood said: "Seraphine has faced an extraordinary convergence of challenges since listing in 2021 including the global supply chain crisis, the cost-of-living crisis and substantial inflation in online marketing costs.

"Whilst the whole retail sector has been affected by these issues, Seraphine, a relatively smaller company new to the London Stock Exchange with a large reliance on e-commerce, has, we believe, been disproportionately challenged."

She said the transaction "would remove the substantial costs associated with being listed and afford management the time and space to give their full attention to a return to profitable growth".

At 1100 GMT, the shares were up 196% at 29p.

Russ Mould, investment director at AJ Bell, said: "While the near-200% one-day increase in its share price to 29p looks very impressive, it still only values the business at a fraction of the 295p per share price at which it joined the stock market in July 2021.

"Seraphine has struggled over the past 18 months from rising costs and falling revenue."