Family office Kin Group has moved to acquire consumer products and wellness company McPherson's via its subsidiary Gallin.
Gallin is offering McPherson's (ASX: MCP) investors $1.34 per share, a 9.8% premium on the 24 March 2021 close price of $1.22. Gallin was incorporated specifically to acquire the MCP. Kin Group is the family office established by Raphael and Fiona Geminder.
McPherson's recommended shareholders take no action on the offer.
"The board of MCP considers this offer to be utterly opportunistic and profoundly undervalues MCP. The board recommends that shareholders take no action at this time," McPherson's said.
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McPherson's share price was boosted by the news, hitting $1.41 today.
"McPherson's is a business that has lost its way and is in urgent need of reinvigoration across its strategy, governance, and leadership," Gallin director Nick Perkins said.
"The company's performance has disappointed shareholders for some time despite owning a number of quality, attractive brands across key consumer markets."
McPherson's financial performance has been deteriorating, Perkins said. The company reported revenue and EBITDA declining by 28.9% and 8.7%, respectively from 2016 to 2020, and Gallin said the negative trend was continuing in the first half of 2021.
"Now investors face a further extended period of uncertainty, including a lack of visibility on the current performance of sales of the Dr. LeWinn's product range into China," Perkins said.
"Although highly uncertain and with no guarantee of success, McPherson's urgently needs to undertake a full operational and strategic review with a view of turning around the business. We have the capital, capability, wherewithal and patience to do this, while shareholders have an opportunity to receive cash now at an attractive premium."
McPherson's lost its chief executive, Laurie McAllister, who resigned in December 2020. Gallin claimed this also eroded investor confidence in the company's governance.
McPherson's is a health and wellness brand supplying pharmacies and supermarkets in Australia and New Zealand. It distributes well-known brands like Manicare, Lady Jane, Dr Lewinn's, Swisspers, Maseur and A'kin.