Struggling outdoor clothing and equipment retailer Kathmandu has caught the eye of a New Zealand homewares and sports retailer seeking a takeover.
Shares in Kathmandu jumped more than 25 per cent on Tuesday, but the company is yet to indicate if it is interested in selling.
Briscoe, the parent company of Rebel Sport in New Zealand and owner of two homewares chains, has paid a premium to lift its stake in Kathmandu from 4.9 per cent to 19.9 per cent, and says a takeover offer is imminent.
It comes as Kathmandu has been struggling to lift earnings amid weak consumer spending and stiff competition.
Kathmandu shares, listed on both the Australian and New Zealand share markets, have more than halved in value in the past 12 months, after profit forecast downgrades and disappointing earnings results.
The company slipped into the red in the first half of its 2014/15 fiscal year with a $NZ1.8 million loss.
Briscoe's managing director Rod Duke said the takeover offer would involve a combination of cash and shares for all Kathmandu shareholders.
"I am excited by the potential that would arise from bringing together these two iconic retailers - we each have strong and recognisable brands that I see as complementary," he said.
The move came a day after Kathmandu's new chief executive Xavier Simonet took on the retailer's top job.
Kathmandu has acknowledged Briscoe's intention to make a takeover bid, but did not indicate whether it was interested in selling.
"Kathmandu has had no contact with Briscoe and will not make further comment about the imminent takeover offer at this stage," it said.
It's an opportunistic takeover bid given Kathmandu's share price has been hovering around all-time lows, said OptionsXpress market analyst Ben Le Brun.
"Obviously Briscoe has seen something in the company that has warranted a bid for control," he said.
"It's a cash and scrip bid which is not as solid as an all out cash bid, but it will be relieving for shareholders who have been battered in recent times."
Briscoe has 90 stores throughout New Zealand, including Briscoes Homeware which sells a variety of household goods from furniture to electrical appliances.
Kathmandu shares gained 32 cents, or 25.6 per cent, to $1.57 on the Australian market, their highest price in three months.
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