Godfreys fields takeover bid as co-founder seeks to buy the company back

THE 99-year old co-founder of vacuum cleaner retail chain Godfreys, John Johnston, has launched a takeover bid for the company.

Godfreys chief executive Jason Gowie.

THE 99-year old co-founder of vacuum cleaner retail chain Godfreys, John Johnston, has launched a takeover bid for the company.

Arcade Finance, which is owned by Adelaide-based Mr Johnston and his family, is offering 32c a share for the company, compared to Monday’s closing price of 21c.

“(Godfreys) listed on the ASX in late 2014 with an issue price of $2.75, but has suffered declining sales, profit downgrades and a plummeting share price,’’ Arcade said in a statement.

“The Godfreys board has announced it will not be paying a 2018 interim dividend.’’

A spokesman for Arcade Finance, Grant Hancock of chartered accounting firm LeCornu Lewis Hancock, said Arcade currently held interests in just more than 28 per cent of Godfreys shares. An associated company, 1918 Finance, also owned by Mr Johnston and his family, is the lender to Godfreys.

“If the Arcade bid is successful, Arcade will apply to delist Godfreys from the ASX and continue to operate Godfreys as a private company,’’ Mr Hancock said.

“Arcade and Mr Johnston see this as the best opportunity to restore value to the company and the confidence of its employees, franchisees and suppliers.

“Arcade believes the restructuring required to restore Godfreys value would best be carried out in a private company environment.’’

Godfreys posted a first half loss of $58.6 million including large write downs and an underlying net profit of $900,000. Revenue was down 8.9 per cent at $84.2 million.

The offer is expected to open on April 24 and to close on May, 24, unless the offer period is extended.

Godfreys is yet to respond to the bid which was announced at 4pm Monday, after market close.

The company is run by chief executive Jason Gowie, who has only been in the top job since December last year.