Monsoon investors seek better buyout terms after sales surge

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The Independent Online

Hedge fund investors in Monsoon, the fashion retailer, vowed to push the founding family to improve the terms of their recent share purchase scheme after the company reported buoyant full-year results and strong summer trading.

Rebel investors said Monsoon's figures for the year to May, which showed profits up 19 per cent to £38m, demonstrated that the founding family was trying to take further control of the company on the cheap. Since May, like-for-like sales are 11 per cent up on the same period last year, boosted by the sunny summer weather.

Stoneycroft, a trust linked to the family of Monsoon's founder and chairman Peter Simon, is trying to buy an extra 20 per cent of the company's shares via a put option scheme. It has already received acceptances related to 19.8 per cent of Monsoon's equity. This would take the family holdings up to 92.3 per cent.

However, the options do not need to be settled until the end of September and some rebel investors say they will press Monsoon to increase the current terms of 140p per share. The rebel camp accounts for more than 2.5 per cent of the shares, meaning it could prevent the family trusts from securing more than 90 per cent of the shares. This would help strengthen the position of minority shareholders.

"Over the next couple of months every avenue will be explored to ensure shareholders don't lose out," said a spokesman for a group of new Monsoon investors.

Mr Simon again defended the family's actions saying: "We've been on the stock market for five years and had a derisory rating. It doesn't look like this company is loved by anyone, except me." He said shareholders could choose whether or not to take up the put option.

Monsoon yesterday named John Clark as its new finance director, replacing Andrew May. Mr Clark was formerly finance director at sandwich retailer Pret a Manger.

Monsoon is also seeking two new non-executive directors as it only has one at the moment and he is due to leave in October. Mr Simon attempted to reassure investors that minority shareholders' interests would be protected. "I am totally signed up to the principle of independent directors. We intend to find two more."

Mr Simon said he was interested in opportunities provided by the Russian market. Monsoon has three franchised stores there but Mr Simon said he had already made several investments in Russia on a personal basis. "As a family we have investments in companies which have investments in Russia. These include a stake in a gold mining company. I am very strongly supportive of the Russian economy and I believe it is going to do well."

Shares in Monsoon fell 0.5p to 136.5p.