Godfrey’s 99-year-old co-founder John Johnston has increased his takeover offer for the vacuum cleaner retailer from 32c per share to 33.5c.
Johnston has also extended the offer period by two weeks to 6.30pm (Adelaide time) on Thursday 7 June 2018.
Johnston, who started Godfreys in 1936 with business partner Godfrey Cohen in Melbourne, launched a 32c per share all-cash bid last month through his family-owned Arcade Finance, which is understood to now hold a relevant interest in approximately 37.60 per cent of Godfreys shares.
At the launch of his takeover bid on 9 April 2018 for the company, Johnston owned 28 per cent of the group.
In a statement issued to the ASX on Thursday 17 May, Arcade Finance expressed concerns that the disappointing recent financial performance of Godfreys and the lack of positive impact from the turnaround strategy will damage Godfreys’ future business prospects.
“As such, Arcade is willing to offer improved terms in order to encourage a speedy completion of its offer and enable Arcade to control future business strategy and decision making.”
Arcade also outlined its intention to support and improve the business as quickly as possible, which it believes will be better done in a private company environment. Major shareholders including NGE Capital, which holds a 15.13 per cent stake, and Kentgrove Capital, which holds a 4.64 per cent stake, have both signalled their intent to sell their shares to Arcade.
Godfreys announced last week like-for-like sales dropped 27 per cent compared to the same time last year, with year to date like-for-like sales also down 7.8 per cent compared to last year.
The retailer attributed the sales decline to changes made to its television advertising campaign in April and May, designed to reduce the company’s reliance on current discount and sales-based approach by focusing more on product features and benefits.
Godfreys said the marketing changes “have not resonated with Godfreys existing customer base and as such the company as reverted to the previous television advertising approach”. The retailer expects underlying EBITDA for FY18, before restructuring and one-off costs to be approximately $3.5 million.