Women’s retail chain Oasis has become the subject of a GBP54 million management buyout. In the public to private deal, PPM Ventures, the private equity arm of Prudential plc, has provided equity backing of around GBP27 million through a newly incorporated UK company, Sierra. A GBP27 million debt package was provided by Bank of Scotland in the form of a guaranteed loan note alternative which is available to Oasis shareholders as an alternative to all of part of the cash consideration to which they would otherwise be entitled under the terms of the offer.
The offer has been made on the basis of 103 pence per Oasis share, valuing the issued ordinary share capital of Oasis at around GBP54 million. PPM investors will hold 88.7 per cent of issued share capital and management will hold the remaining 11.3 per cent.
Oasis’ principal activity is design-led women’s fashion retail operating as two distinct brands: Oasis and Coast, which are placed at the upper end of the middle market. Sierra is a new company formed specifically for the purpose of making the offer. Sierra is backed by PPM Ventures and a management team led by Oasis chief executive Derek Lovelock with other directors and senior management of Oasis.
Gareth Whiley, investment director at PPM ventures said of the company: “Oasis is a great brand that has had some operational problems. The founders had been there a long time and the chain got so big, it became difficult for them to manage. It is probably in the best interest now for the company to be off the market than to face public scrutiny every quarter.”
He added that the Oasis brand itself has had a rocky time over the past few years, but presents some great opportunities that will be realised with professional management expertise.