Naked Wines Launches 80p Tender Offer

Naked Wines (LON: WINE), the online retailer that funds independent winemakers, has launched a tender offer to buy back between £2.0m and £5.7m of its shares at a fixed 80p. The price is about 27% above yesterday’s 63p close.

The shares stood at 69.80p at about 14:10 UK time, up 10.8% on the day, after trading between 64.03p and 73p on volume of 690,493 shares, against 82,734 yesterday. The announcement came at 7am, before the open. The company did not comment on the share price, so the link rests on timing and the premium.

The offer covers up to 7.1m shares, 10.72% of those in issue. The board will accept about £5.7m if net cash at the peak Christmas trading period is at or above the midpoint of its £34m to £42m guidance range, and about £4m if it lands in the lower half. The final size is announced on the 8th of December.

The company’s chair, whom the announcement does not name, framed it as an extra payout.

This Tender Offer represents an additional ad-hoc distribution to enhance shareholder value, separate from and complementary to the Company’s ongoing capital distribution policy which remains unchanged.

Chair, Naked Wines plc

Net cash, excluding lease liabilities, was £34.0m at 28 September, against £33.4m at the last year-end, so the maximum is roughly 17% of it by our calculation. It follows the £6m returned through a buyback in the last financial year. On our calculation, the maximum is roughly 12% of the company’s market value of about £46.2m at the 14:10 price.

Trading is in line with guidance for the current year, which was reiterated rather than raised. Half-year member retention was 79% (76% a year earlier) and gross margin 21.7% (19.5%), though customer acquisition volumes remain low.

A group of shareholders treated as acting together under the Takeover Code holds 28.09%. Two members have promised to tender, which keeps the group under 30% and explains the 10.72% cap. Holders need not tender, and only those who do receive 80p.

Shareholders vote on the 8th of December. The tender closes on the 10th of December, with the result and half-year results due on the 11th of December.