The Austrian hosiery specialist said Fosun Industrial Holding Limited and Wolford’s main shareholder group (consisting of WMP Family Private Foundation, Sesam Private Foundation, M. Erthal & Co. Holding, as well as relating parties) have agreed to the sale of approximately 50.87 percent of Wolford’s total share capital. This amounts to 2,543,694 shares, with the expected purchase price to amount to 12.80 euros per share.
The closing of the agreement is subject to merger control authorities.
The deal foresees a cash capital increase (maintaining shareholders’ subscription rights), which will provide 22 million euros of fresh equity to the financially challenged company. The capital increase requires a resolution by the general meeting which is to take place in May 2018.
Fosun and Wolford are scheduled to sign the agreement this week. In connection to the agreement, Fosun also said it intends to launch an anticipatory mandatory takeover offer to the remaining shareholders of Wolford AG. The price per share in the takeover offer is intended to amount to the weighted average stock exchange price of the last six months, which would exceed the 12.80 euros purchase price per share in the share purchase agreement. On Thursday, the Wolford share was trading at 14.30 euros on the Vienna Stock Exchange, up 10.85 percent.
Fosun is also the largest shareholder (with an almost 30 percent stake) in German young sportswear brand Tom Tailor, holds a stake in St. Johns Knits, and last year completely took over the Italian tailor Caruso in which it had initially invested in in 2013. Now in the process of restructuring, Wolford reported a slightly improved sales and earnings performance in the first half of fiscal 2017-18. For the period from May to October 2017, the company grew sales 3.7 percent to 70.2 million euros, while the net loss after taxes was reduced to 6.6 million euros compared to a loss of 8.1 million euros for the period a year previously.
For fiscal 2017-18, Wolford recently forecast slight year-over-year sales growth and continued negative operative earnings. It noted the restructuring measures now being implemented would first take full effect in the 2018-19 financial year, at which time the Bregenz-based company said it anticipates renewed a positive EBIT performance.
Wolford employs about 1,500 persons, about half in its headquarters in Bregenz, Austria. There are a little under 200 Wolford boutiques worldwide, of which 109 are under direct company control. Under the current restructuring program, the company said a single digit number of locations are under review.