Kathmandu rejects Briscoe's takeover offer

The Directors of Kathmandu Holdings Limited ("Kathmandu") have unanimously recommended that Kathmandu shareholders REJECT the unsolicited takeover offer from Briscoe Group Limited ("Briscoe").

Kathmandu’s Target Company Statement, released today sets out the key reasons for this recommendation.

Briscoe is offering five shares for every nine Kathmandu shares and NZ$0.20 cents for each Kathmandu share (the "Offer").

The Directors of Kathmandu believe that the Offer, with an implied value of NZ$1.80 per Kathmandu share is inadequate and does not reflect the underlying value of Kathmandu.

Kathmandu engaged Grant Samuel as Independent Adviser to review the Offer. Grant Samuel has concluded that the full underlying value of Kathmandu’s shares (on a control basis) is in the range of NZ$2.10 to NZ$2.41, well in excess of the implied value of the Offer of NZ$1.80.

The reasons for the Director’s recommendation that Kathmandu shareholders reject the Offer include:

- The Offer is below the Independent Adviser’s valuation;

- The Offer is inadequate and does not reflect the underlying value of Kathmandu;

- Briscoe can afford to offer a lot more for the Kathmandu shares and is not sharing enough of the benefits of the transaction with Kathmandu shareholders;

- The timing of the Offer is highly opportunistic, timed to exploit Kathmandu’s recent share price underperformance;

- The Offer fails to reflect the strength of Kathmandu’s business and future plans for growth;

- Becoming a Briscoe shareholder would change the profile of Kathmandu shareholders investment; and

- The implied value of the Offer is uncertain.

Commenting on the Offer, Kathmandu’s Chairman, David Kirk said:

"Briscoe’s Offer is manifestly inadequate and does not reflect the value of Kathmandu’s shares.

The Board believes the Offer is intended to create value for Briscoe shareholders at the expense of Kathmandu shareholders. It comes opportunistically off the back of an isolated period of internal and external challenges experienced by Kathmandu in the period leading up to and including Q3 FY2015. I am confident that management can deliver strong results that will, over time, result in superior value for Kathmandu shareholders".

Also included in the Target Company Statement is Kathmandu’s preliminary unaudited statement of financial performance for the year ended 31 July 2015.

The Directors will keep shareholders updated regarding any significant developments in relation to the Offer. A Kathmandu Information Line has been established for shareholders to address any queries in relation to the Offer. The phone number for the shareholder information line is 0800 777 256 (from within New Zealand), 1800 190 082 (from within Australia) or +64 9 375 5998 (from outside New Zealand and Australia).