A major shareholder of Moss Bros, Cavendish Asset Management, is expressing frustration over Brigadier Acquisition Company’s attempt to withdraw from its agreed deal to acquire the retailer. The reason given by Brigadier is the significant impact of the Covid-19 pandemic on the company’s prospects. However, fund manager Nick Burchett argues that Brigadier should not be allowed to back out of the deal at this stage. Burchett emphasizes that the coronavirus had already been declared a pandemic by the World Health Organization when the deal was made on March 12, prior to the UK’s lockdown. He also criticizes the buyer, calling it “disgraceful” if they were allowed to walk away from the £22.6 million takeover deal.

Cavendish Asset Management has previously experienced disappointments with its investments, including stakes in Bonmarché and Laura Ashley. Initially, when the deal with Moss Bros was announced, Brigadier’s owner, Menoshi ‘Michael’ Shina, and other involved entrepreneurs expressed optimism about the retailer’s future under private ownership. However, it was recently revealed that Brigadier has appealed to the UK’s Takeover Panel to cancel its offer, citing a material adverse change (MAC) clause due to the coronavirus.

The outcome of this appeal remains uncertain, as the bar is set quite high to prove a MAC clause. The Takeover Panel has never agreed to cancel a deal on these grounds before. Previous rulings have emphasized that the risk of an acquisition not meeting initial expectations in a takeover situation must be accepted.

As of now, the situation surrounding Moss Bros and its acquisition deal with Brigadier Acquisition Company remains unresolved. Cavendish Asset Management, being a major shareholder, is expressing its discontent with the attempt to back out of the agreement. The fate of the deal ultimately depends on the decision of the UK’s Takeover Panel.

Useful Links:
1. Link 1: Takeover Panel – Official Website
2. Link 2: Cavendish Asset Management – Official Website