Accent Group has advised its shareholders to vote against the hostile takeover bid from Frasers Group, citing significant concerns that the acquisition would eliminate the company's dividend payments.
The Australian footwear retailer's board argues that ceding control to the British retail conglomerate would fundamentally alter the investment profile for current holders, who have relied on regular income distributions.
The warning comes as Frasers Group solidifies its position in the bid, having previously stated in its offer documentation that it does not intend to support dividend payments for the foreseeable future.
This stance creates a direct conflict with the expectations of Accent's existing investor base, many of whom are attracted to the stock for its yield rather than pure capital appreciation potential.
Accent's board has previously characterized the 65-cent per share offer as opportunistic and materially inadequate, suggesting the price fails to reflect the company's standalone value and growth prospects.
The rejection adds a new layer of complexity to the deal, shifting the focus from valuation alone to the structural changes in shareholder returns that would accompany a change in control.