Hi @NewbieHK - to me its the transfer of the investment from the impatient (PE with a 3 to 5 year exit mandate) to the patient. Whether that transfer of ownership between these two means value gets transferred as well - time will tell. I think the selection of the CEO is interesting, her comments on taking the job a few months ago were definitely directed at the mum demographic. On latest forecast from the company, we're talking a stock on a forward PE of less than 10, with no debt, and assuming profit sticks a high ROE so it definitely makes it an interesting situation. I think there's some work to do to get the business rolling again too, based on last result which was a bit mixed - like for like sales down and online down - given Ray Itanui's current business went to full online recently (Sanity), I'm hoping he can sort that out. I hold IRL and I'm sticking with it (and considering topping up - given what looks like reasonable odds).

Hi @Byrnesty - will steal @Rick thunder here...I follow this one - and I hold IRL and in SM.

My interpretation is that this is about providing an easier exit for Allegro and former CEO to exit without demolishing the share price.

My reasoning - I notice in the announcement that it only has a 55% minimum acceptance condition - meaning that the takeover can be finalised without taking full control - BBRC are at 55% between BBRC itself's holding, and Allegro and Jason announcing they are supporting the bid.

Given it's pitched at a discount to current price - I think that's intended as not many other shareholders would likely sell at that price. Put more plainly the intention is not for BBRC to take full control (or at least they don't want to pay a premium now and don't have to, to get control). Ultimately, I think this is a legal way of BBRC taking out Allegro and Jason, without having to go through the trouble of having to get shareholders to agree to waive the takeover rules to allow BBRC to go over 20% - which is uncertain, costly and takes time. Where we end up I think is BBRC with over 55%, and but not much more and it continues on as a listed company, albeit with a very big brother.

This is the usual PE imperative, even if at a lower price, Allegro have to exit at some point in a 3 to 5 year time frame - it's a big problem for PE, sometimes they are forced to exit, even great companies at lower prices due to mandates. Not something someone like BBRC ever worries about.

So then the decision is, as an investor are you happy to sit in a company with a major shareholder that has over 50%, that has obvious stock liquidity issues (not to mention how minorities fare in these situations...sometimes).

But, it's Brett Blundy and he is a retailing genius (think Lovisa, Sanity, Bra's n things, Dusk) - for mine, it's still a good business at an attractive price with high ROE, and now with an astute retailer holding a majority stake - if Brett thinks it's worth lifting his stake, I think that is something significant to think about. So I'm going to be staying in for the moment.

Thanks @rh8178 for those insights.

That all makes perfect sense and actually makes BST even more attractive in my eyes...and selling at a discount as a result.

I'm now a small holder IRL.

@Byrnesty, sorry for the slow reply. I agree with @rh8178 ’s comments.

My wife and I are on a road trip down to The Great Ocean Road for a few weeks and we still have a week to go. Explains why you haven’t heard from me on Strawman lately.

I saw the take over news in Street Talk in the AFR early this morning which was later confirmed by the ASX announcement.

I started a straw this morning but haven’t had time to finish. I’ll get back to it soon. Just a quick sum up for now. I am very excited about the Blundy and Itaoui take over offer. These are two of the smartest retailers in the business and I think they have seen an opportunity to snap up a good business at a bargain price. I’ll be holding every share I own for now and can’t wait to see what the duo have in mind for the business from here. A 55% stake in Best & Less is a huge commitment and these guys have a strong track record of turning businesses into winners!

Back soon with more.

Cheers,

Rick

I should clarify also, I did hold in SM, but sold. Still hold IRL. Also hold Lovisa and Dusk IRL.

Great commentary @rh8178 , @Rick and @Byrnesty . I hold IRL and was slow to respond (trying to get stuff done before a 10 week work and holiday trip!). Although I don't love the idea of a takeover below the then current price I can understand the arguments that this makes the company stronger. There are some great people in charge and I look forward to holding for a while yet! Might even increase mum's stake for the divvies!

Nessy