Retail shopping group N Brown has agreed a deal to be acquired by Falcon 24 Topco Limited (Bidco) that values the business at £191m.

In a statement, the board of directors of Falcon 24 Topco Limited (Bidco) and the independent directors of N Brown Group plc announce that they have reached agreement on the terms of a recommended cash acquisition, pursuant to which Bidco, a newly formed company owned and controlled by Joshua Alliance, will acquire the entire issued and to be issued share capital of N Brown, other than the N Brown Shares already owned or controlled by Joshua Alliance.

It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme.

The Cash Offer represents a premium of approximately 111% to the volume-weighted average closing price of 19p per N Brown Share for the 12-month period ended at the close of business on the Latest Practicable Date, as well as 63.8% to the volume-weighted average closing price of 24.4p per N Brown Share for the 90-day period ended at the close of business on the Latest Practicable Date; and 48.1% to the closing price of 27.0p per N Brown Share as at the close of business on the Latest Practicable Date.

As an alternative to the Cash Offer, eligible N Brown Shareholders may elect to receive one unlisted ordinary share in the capital of Bidco for each N Brown Share.

Bidco believes that, in light of N Brown’s current shareholder structure and very low trading liquidity, and the limited UK fund manager appetite for small cap consumer stocks, N Brown is not benefitting from being listed on the AIM market, whilst having to bear significant costs associated with its listing.

Bidco further believes that it can support N Brown in accelerating its long-term growth potential, and that it can provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.

The Bidco is controlled by Joshua Alliance, who joined his father, Lord Alliance, on the group’s board as a non-executive director on 23 December 2020 when N Brown listed on the AIM market. He will acquire the entire issued, and to be issued share capital of N Brown, other than the shares already owned or controlled by Joshua Alliance.

Bidco has confidence in N Brown’s current executive team and its leadership. Bidco plans to support the existing executive team’s strategy and intends to work with N Brown’s current executive team to develop, enhance and implement that strategy following completion of the Acquisition.

It notes that Steve Johnson, interim chair and CEO, and Dominic Appleton (CFO), being each of the N Brown independent directors who hold N Brown shares, have agreed to elect for the share alternative in respect of all of their current holdings of N Brown shares.

The acquisition is expected to become effective in the first quarter of 2025.

Commenting on the announcement, Joshua Alliance said: “My family have been supporters of N Brown for over half a century, providing capital and having been involved in the strategic leadership of the business. I am delighted to continue that history. This transaction will support N Brown in accelerating its long-term growth potential and provide, where needed, access to additional capital, expertise and resource to accelerate the longer-term potential of the business.

“In the business’ current cycle of evolution, we will be able to achieve this growth potential more successfully away from the public markets. I am excited about the opportunities created by this portfolio of well-established fashion brands, supported by an innovative financial services platform and its talented executive team and employees.”

Steve Johnson, Interim Executive Chair and CEO of N Brown, added: “N Brown continues to consistently serve its loyal and otherwise underserved customers, with exciting long-term prospects for the business. We continue to deliver on our strategy for growth, enabled by a sustainable and efficient operating model, and supporting our people and talent. Bidco will enable us to accelerate that strategy for the benefit of all our stakeholders. The N Brown Independent Directors are therefore unanimously intending to recommend it to our shareholders.”