Brett Blundy lobs $236.3m takeover tilt for retailer Best & Less

The discounted offer has already won support from key investors Allegro and chairman Jason Murray.

Brett Blundy is a director on the Best & Less board.

Billionaire Brett Blundy had launched a takeover offer for Best & Less in a deal that has already won the backing of the discount retailer’s key investors.

Mr Blundy’s BBRC International is offering $1.89 per share for the chain that owns 248 physical stores and an online platform. BBRC also has investments in other high-profile retailers included Honey Birdette, Adairs and Lovisa.

The offer, being made in conjunction with Mr Blundy’s long-time business associate Sanity Group owner Ray Itaouim, values Best & Less at $236.3m compared to a market capitalisation of $249m. The shares closed down 2.5 per cent at $1.94 Monday.

Mr Blundy, who founded Sanity at the age of 20, sold it to Mr Itaoui in 2010. BBRC currently owns 16.45 per cent of Best & Less and has been a cornerstone investor since its initial public offering in 2021.

The deal has been backed by key investors Allegro and chairman Jason Murray and comes amid increasingly tough retail conditions.

Best & Less posted a one third slide in half-year profit in February, as strong trading through Christmas was not enough to counter the earnings hit of a delayed start to summer and heavy discounting on some of its merchandise to clear stock.

The retailer said in February that consumer shopping behaviour continued to normalise towards pre-Covid-19 levels into the new year, with in-store traffic increasing while online sales moderated. For the first seven weeks of the second half of the 2023 financial year, sales were up 3.8 per cent, with same-store sales better by 3.9 per cent.

Best & Less’ board said major shareholders – Allegro which holds a 32.43 per cent stake and Mr Murray’s Bignor Family Pty Limited, which holds 8.27 per cent – intend to accept the bid, subject to there being no superior offer. An independent board committee has been formed to evaluate and respond to the takeover offer and offer a recommendation to shareholders.

Best & Less earlier this year said it was accelerating its investment in online, including a new

customer data platform, new mobile app and consumer website design. The company also announced plans to open six new stores in the second half of the year, including one in the Macquarie Centre in Sydney. Best & Less also operates in New Zealand under the Postie brand. The company earlier this month hired former The Iconic boss Erica Berchtold as its new chief executive. Best & Less chair Jason Murray, said in February that having successfully transformed the business to a low price specialty value retailer, it was now “laying the foundations for the next phase of growth”.

“We are evolving to a ‘one company, two brands’ structure, which will enable us to

operate even more efficiently as we continue to invest in enhancing our

omnichannel capabilities and rolling out new stores,” Mr Murray said.