It looks like it's going to be a short-lived adventure as a listed ASX company for apparel wholesaler and retailer PAS Group Ltd (ASX: PGR) after the group received a takeover offer from the obscure Australian Brands Investment LLC which is linked to the relatively unknown Coliseum Capital Management LLC, a Connecticut-based firm.
PAS owns a range of well-known brands including Metalicus and Review, as well as holding Australian licenses over brands such as Slazenger and Everlast.
Background
PAG Group's initial public offer (IPO) occurred in June 2014 at a price of $1.15 per share. The stock has struggled to trade above its issue price with the shares recently trading as low as 40 cents before a takeover was announced this week at a price of 63 cents per share.
Retail and Apparel M&A on the rise
Last year leading department store operator David Jones was taken over by the South African based Woolworths for approximately $2.2 billion. With PAS Group now receiving an offer, it could be the start of further merger-and-acquisition (M&A) consolidation activity across the sector.
The Solomon Lew controlled Premier Investments Limited (ASX: PMV) has often been touted as a potential acquirer of retail brands which already is home to Smiggle, Just Jeans and Jay Jays amongst others.
At one point there was speculation that Lew may make a grab for Myer Holdings Ltd (ASX: MYR) with the murmurs becoming more intense when Lew hired ex-David Jones' CEO Mark McInnes to head up Premier Investments in 2011.
Other companies which have been underperforming and with depressed share prices that could attract potential suitors are Pacific Brands Limited (ASX: PBG) and OrotonGroup Limited (ASX: ORL).