Bonmarche advises shareholders to take no action after takeover bid

Wakefield-based Bonmarche said the offer materially undervalues the company and said it is to embark on its own cost-cutting exercise.

The Yorkshire Post asked the firm whether this would lead to store closures and job losses, but has not received a response yet.

Bonmarche said that, in light of the fourth quarter, it is planning a number of "cost reduction actions across the group and anticipates starting the implementation of these shortly".

Mr Day, who is behind The Edinburgh Woollen Mill Group, has already warned he would implement job losses or store closures if his bid succeeds.

Earlier this month Mr Day acquired more than half of the company's shares through holding company Spectre, triggering a mandatory takeover bid.

Rejecting Mr Day's overtures, Bonmarche said: "In view of Spectre's position as the majority shareholder in Bonmarche, the board has sought to engage with Philip Day to discuss the future plans for the business for the benefits of all stakeholders. The board continues to seek positive engagement with Philip Day and looks forward to discussions in due course.

"The board will be writing to shareholders with its formal response to the mandatory cash offer once the offer document has been posted by Spectre.

"In the meantime, Bonmarche shareholders are strongly advised to take no action in relation to their Bonmarche shares. Further announcements will be made as and when appropriate."

Earlier this month, Mr Day bought more than 26 million shares, representing 52.4 per cent of the struggling firm.

At just 11.445p per share, the offer represents a significant discount and values the whole entity at just £5.7m.

At the time, Spectre said that it would undertake a profitability assessment on Bonmarche's estate of more than 300 stores and shutter under-performing sites or reduce costs by cutting the number of staff or seeking a lower rent.

It comes after Bonmarche issued its third profit warning in just six months in March.

The womenswear retailer said it has seen "significantly weaker" trading since the start of the month, reversing a bounce-back in January and February after it resorted to heavy discounting to shift stock.

Mr Day's name has been linked with several retail turnarounds. At the weekend he was named as a bidder in the race for collapsed womenswear brand LK Bennett, although he later withdrew from the process.

Last year he was one of the potential buyers circling House of Fraser, which was eventually sold to Sports Direct owner Mike Ashley.

His other investments include Peacocks, Proquip, Austin Reed, Country Casuals, Jaeger and Jacques Vert.