Country Casuals, the ladies' fashion wear group, yesterday received a near-pounds 27m hostile takeover bid from its former chairman and chief executive, John Shannon.
Mr Shannon is making the bid through a company called Ciro Holdings, principally a jewellery group, which he bought out of receivership last autumn.
The bid is being financed by means of subscriptions for shares in Ciro by Gartmore, Causeway and by another company controlled by Mr Shannon's charitable and family trusts, as well as through bank credit facilities of approximately pounds 17.5m to be provided by Societe Generale.
Shares in Country Casuals, which traded at 115p before an announcement last week that it had received a bid approach, moved up a further 6p to 138p yesterday, just 2p below the 140p-a-share bid price.
Mr Shannon owns 18.8 per cent of Country Casuals' shares and he has already gained irrevocable acceptance from the group's next largest shareholder, Phillips and Drew Fund Management, in regard to its holding of around 13.3 per cent.
Mr Shannon said there were several options he could have chosen. "I could have dumped my shareholding which would have been disastrous for the share price. I could have been an opposing shareholder at company agms or I could come up with a generous cash offer, which I have done."
He said a number of other institutional shareholders had expressed support for his bid but that none other than PDFM had decided to accept his bid "at this stage".
The other leading institutional shareholders in Country Casuals are Equitable Life (around 7.5 per cent), Schroders (7 per cent), Norwich Union (6 per cent), Lazards (6 per cent), and Robert Fleming (5 per cent).
Mr Shannon said the Country Casuals management had not addressed fundamental issues. He disputed a statement from the board suggesting that the company had made substantial progress since 1994.
He said the continuing operations of Country Casuals had made losses before tax of pounds 1.048m for the first half of the current financial year, an increase of 20 per cent over the previous year.