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On 29 April 2020 Moss Bros (Moss) that it had received shareholder approval for its recommended takeover by Brigadier Acquisition Company limited (Bidco), a vehicle owned by Crew Clothing’s Menoshi Shina.

This comes after Bidco had last week their intention to step away from its £22.6 million offer for the suit retailer. The company had informed Moss that ‘it is seeking a ruling from the Takeover Panel in order to invoke a condition of its offer and lapse its offer for Moss Bros’.

Since its initial on 12 March 2020, lockdown measures caused by COVID-19 have caused Moss to close down its stores. Moss had that;

‘The Group expects that the effects of COVID-19 will result in a significant reduction in revenue and profitability for the year ending 30 January 2021 ("FY21"), however it is too early to determine the precise quantum at this stage. Prior to 13 March 2020 the Group had been trading as expected.’

However, Moss had initially cited the ‘highly uncertain, but potentially significant, impact of COVID-19’ amongst the reasons for recommending the acquisition in its initial announcement on 12 March 2020, prior to the lockdown.

Under the requirements of the Takeover Code, in order for Bidco to walk away from the deal, the circumstances must be of ‘material significance’. In the case of a material adverse change (MAC), or similar condition, the Panel has previously stated that this requires the offeror to demonstrate that the relevant circumstances are of a very considerable significance, striking at the heart of the purpose of the transaction. Moss has stated that it will take ‘all necessary action’ to show that the necessary requirements have not been met, and the offer should therefore go ahead.

Market Tracker will continue to monitor this transaction as it develops.