Retailers on Sale! OrotonGroup Ltd Up For Grabs

Shoppers and investors have one thing in common. They both love a sale. Whether it be clothing or a business, they’re always looking for bargains.

Well, it seems a retailer is now up for sale. OrotonGroup Ltd [ASX:ORL] announced this morning that ‘numerous parties’ were interesting in buying the company.

As reported by The Australian Financial Review:

‘…OrotonGroup’s board has now commenced a formal process to explore these options and will invite additional parties to participate in the process.

“It is premature to comment in detail on potential structures, terms or outcomes,” OrotonGroup said.

The 79-year old company is 21 per cent owned by the Lane family, descendants of founder Boyd Lane, and 17 per cent owned by Caledonia Funds chief investment officer Will Vicars, who was a long term non-executive director until he resigned abruptly last month.

The controlling shareholders have been under pressure from institutional investors to privatise the retailer so it can be restructured away from the glare of public markets.

What now?

It’s not surprising Oroton is thinking of selling. The group said ‘market conditions remain very competitive and challenging’. Putting more pressure on the company is the lack of funding. Oroton has a $35 million facility with Westpac Banking Corp [ASX:WBC]. Yet this facility expires on 16 April, 2018.

Caledonia Funds’ CIO, Will Vicars, is prepared to put up $3 million to support the company’s bank facility with Westpac. Yet at the moment, things are looking uncertain for the fallen retailer.


Härje Ronngard,

Junior Analyst, Money Morning

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