Seraphine, the luxury maternitywear brand, has revealed that it is proposing a cash bid to its shareholders, valuing the company at £15.3 million. The offer, which amounts to 30p per share, comes from Mayfair Equity Partners (MEP), Seraphine’s existing private equity investor. This news may come as a disappointment to those who purchased Seraphine shares during its recent initial public offering (IPO), as the shares were originally priced at £2.95 each. However, the offer price still surpasses the closing price on Thursday, which was less than 10p per share.

The decision to privatize once again comes on the heels of Seraphine’s recent struggles, with the company reporting a decline in revenues last month. The completion date of the deal remains uncertain, but it appears likely given the substantial premium offered compared to the Thursday closing price, assuming other shareholders accept the offer.

Founded in 2002 by Cecile Reinaud, Seraphine expanded into a global brand with physical stores in prominent shopping cities and an online store that served customers in over 100 countries. Reinaud retired from the company in 2020, and David Williams, a former ASOS executive, took over as CEO. A management buyout supported by MEP valued Seraphine at around £50 million. MEP retained a 40% stake after the company’s IPO in 2021, and investors were optimistic about the brand’s future prospects.

However, like other online retailers in the same price range, Seraphine has faced recent challenges. Despite this, Mayfair Equity Partners still believes in the value of owning the company. Bertie Aykroyd, a partner at MEP, expressed that the company’s share price has had a negative impact on its ability to execute its strategy and attract and retain talent. Going private would eliminate the expenses associated with being publicly listed, enabling the company to navigate the current macroeconomic instability more effectively.

As part of the agreement, MEP will inject additional capital into Seraphine to strengthen its financial position and safeguard its operations. The aim is also to provide liquidity to certain shareholders who wish to realize their investment by receiving cash at a substantial premium. Seraphine Chair Sharon Flood acknowledged the exceptional challenges the company has faced since its IPO in 2021, including the global supply chain crisis, the rising cost of living, and significant inflation in online marketing expenses. While the company remains confident in its ability to restore profitable growth in the future, securing additional capital now would expedite its growth strategy. Attempting to obtain this capital through the market would be highly dilutive and time-consuming.

The independent directors of Seraphine have assessed Mayfair Equity Partners’ offer as fair and reasonable, and they are endorsing it to shareholders. The offer represents a premium of roughly 200% to the current share price.

Useful Links:
Seraphine Official Website
Mayfair Equity Partners Official Website