Shares of Superdry surged over 100% on Friday morning, reaching highs of 48.55 pence per share, as co-founder and CEO Julian Dunkerton confirmed he is exploring taking the British fashion retailer private.
The dramatic share price movement comes amid a turbulent few years for the company. Despite a successful IPO in 2010 and a peak share price above £20 in early 2018, Superdry has struggled recently with falling sales, declining share value, and boardroom drama.
Dunkerton, who co-founded Superdry in 2003 and led its early rapid expansion, left the business in 2018 following disagreements over strategy. But he returned in 2019 after leading a shareholder revolt, regaining his position as CEO. Since then he has aimed to revive sales by returning a focus to the brand’s design roots.
However, the company has continued to face challenges, with its share price languishing below 30p amid the UK’s ongoing cost-of-living crisis. This week it emerged that Norwegian hedge fund First Seagull had built a 5.3% stake in Superdry, making it the second largest shareholder behind Dunkerton’s 18.5% stake.
This fuelled speculation that Superdry could become a takeover target, given its depressed valuation. Those rumors intensified on Friday when the company confirmed Dunkerton is exploring taking Superdry private again, with the backing of unnamed “potential financing partners.”
In a statement, Superdry said: “Julian Dunkerton has since confirmed to the Transaction Committee that he is engaged in discussions with potential financing partners (“Potential Sponsors”) for the purposes of considering options in respect of the Company, which may include a possible cash offer for the entire issued and to be issued share capital of the Company, not already owned by him.”
“These discussions are at a preliminary stage and no decisions have been made,” the company added.
Dunkerton has until March 1st to firm up an offer under UK takeover regulations. Analysts said he would likely need to offer at least 60p per share to convince shareholders to approve a take-private deal.
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A private Superdry would give Dunkerton greater control to execute his vision for reviving the brand without the short-term distractions of being a listed company. But it would be a risky move given the challenging retail environment.
Nonetheless, today’s dramatic share price surge indicates investors are intrigued by the opportunity and believe there is underlying value in the Superdry brand.
The coming weeks will determine if Dunkerton can line up the financing required to take the company private again, or if Superdry’s future remains as a publicly listed firm.