N Brown Group is set to be acquired by the Alliance family in a £191 million deal, subject to shareholder approval, expected to finalise in 2025.
- The independent directors of N Brown and Bidco, a firm controlled by Joshua Alliance, have agreed on a recommended cash acquisition.
- The Alliance family holds 53.4% of N Brown shares; shareholders, including Frasers Group, will receive 40p per share in cash.
- Joshua Alliance will acquire all remaining shares, aiming to enhance growth, capital access, and expertise for N Brown.
- The decision responds to low trading liquidity and limited UK fund manager interest in small cap consumer stocks, affecting N Brown’s AIM listing.
The N Brown Group, a significant player in the retail market, is poised for acquisition by Bidco, a company wholly controlled and owned by Joshua Alliance. This development, announced on 17 October, marks a pivotal shift for N Brown, which has faced challenges due to its shareholder structure and low trading liquidity. The recommended cash acquisition comes at a time when traditional stock market frameworks are proving expansive yet not beneficial for smaller market cap companies like N Brown.
Currently, the Alliance family holds a commanding 53.4% of N Brown’s shares. Among its shareholders is Frasers Group, spearheaded by Mike Ashley, which possesses a 20.3% stake. In this acquisition, investors are presented with a choice: accept 40 pence per share in cash or opt for an alternative wherein eligible shareholders may receive one unlisted ordinary share in Bidco per existing N Brown share.
CEO Steve Johnson and CFO Dominic Appleton have opted for the share alternative for their current holdings, reflecting a strategic preference aligned with their long-term vision. This decision underscores their trust in the strategic direction proposed under Joshua Alliance’s guidance.
When Joshua Alliance joined the board as a non-executive director in December 2020, alongside his father, Lord Alliance, it marked the beginning of an intensified interest in the company’s governance and strategic approach. Now, with his 6.6% stake, he is set to acquire the entirety of N Brown’s remaining share capital, aiming to unlock growth potential and streamline operational efficiencies.
The AIM listing has proven burdensome for N Brown due to the costs involved and a general lack of appetite from UK fund managers for smaller consumer stocks. In light of this, Joshua Alliance stated that the transaction would serve as a catalyst for accelerating N Brown’s growth trajectory, providing access to additional capital, resources, and necessary expertise to bolster the company’s long-term potential.
The completion of the acquisition, pending shareholder approval, is anticipated by early 2025, marking a significant transition for N Brown Group.
