Troubled maternity wear chain Seraphine is facing criticism from a major shareholder who argues that the company is undervalued. The shareholder believes that Seraphine is worth more than the £15.3 million offer it received from Mayfair Equity Partners. Mayfair had previously listed Seraphine and sold shares for 295p each, but now they are offering 30p per share to buy back the company. While this offer represents a 206% premium to the previous day’s closing share price, the anonymous shareholder insists that Seraphine’s true value is at least 50p per share. They also suggest that if the company remains independent until economic conditions improve, its value could increase significantly.

According to the shareholder, Mayfair’s approach is part of a larger trend among private equity firms seeking to profit from the low valuations of UK smaller companies. The current economic climate has negatively affected the value of fashion and fashion-linked companies like Seraphine, as seen with examples such as Ted Baker, Joules, Dr. Martens, and Boohoo. The fall in share prices has made these companies attractive for buyers looking for bargain prices. However, the shareholder argues that Seraphine should not be sold at a discounted price because its true value is higher and could potentially increase in the future. They believe that the company should remain independent to fully realize its worth when economic conditions improve.

This situation reflects the challenges faced by struggling fashion companies in the current market. The uncertain economic climate has led to decreased consumer spending and lower investor confidence, resulting in significant declines in share prices. While private equity firms may be enticed by these low valuations, it is important to consider the long-term potential and value of these companies.

In the case of Seraphine, the shareholder maintains that the company deserves a fair valuation that reflects its true worth. By remaining independent and weathering the current economic storm, Seraphine has the potential to recover and thrive in the future. This sentiment is shared by many shareholders who believe in the company’s potential and are unwilling to sell at a discount.

Ultimately, the decision on whether to accept Mayfair’s offer rests with Seraphine’s board. Nevertheless, the criticism from a major shareholder underscores the importance of carefully evaluating the valuation and future prospects of the company. In an uncertain market, it is crucial to make decisions that prioritize the long-term success and value of fashion companies like Seraphine.

Useful links:
Financial Times: Seraphine faces criticism from major shareholder over price
Drapers Online: Seraphine faces criticism over Mayfair Equity Partners deal