Cenomi Retail weighs up selling nearly 50% stake

Cenomi mulls stake sale: Cenomi Retail is currently in talks to sell nearly half of its total share capital (up to 49.95%) to an undisclosed company operating in the fashion and retail sector, according to a disclosure to Tadawul. The stake on offer falls just below the 50% mark that triggers a mandatory tender offer.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

Who’s selling? Discussions are already underway with some of Cenomi Retail’s major shareholders, including members of the Alhokair family, Saudi Fas Holding, and Fas Real Estate to sell down their position in a private transaction.

BUT- We don’t know much about the buyer: The strategic investor interested in the stake holds franchise rights for a number of global brands, the statement said, without disclosing additional details about the suitor.

More than equity on the line: Cenomi is also negotiating a post-acquisition shareholder loan agreement with the investor to shore up the firm’s financial position and support its operational continuity. Both the acquisition and the shareholder loan remain subject to final agreements and regulatory approvals.

REMEMBER- The company first hinted at the potential sale in August of last year, after shelving merger talks with a global fashion player, according to an earlier filing to the exchange.

Cenomi Retail swung back into the black in 1Q, posting SAR 1.8 mn in net income, compared to a SAR 151.7 mn net loss over the same quarter last year. Revenues rose 11.2% y-o-y to SAR 1.3 bn during the same period. The company has been actively trimming its footprint, exiting non-core markets, and focusing on top-tier brands as it pivots toward a leaner, more capital-efficient model.

Market Reax: Cenomi Retail’s stock rose 2.8% to close at SAR 29.8 yesterday.

More M&A action to look out for: Tadawul-listed F&B giant Almarai inked a SAR 1 bn share purchase agreement last month to acquire 100% of water bottling firm Pure Beverages. Meanwhile, Ethraa Holding inked a binding MoU late last month to acquire a 100% stake in Al Reef Sugar Refinery, in which Tadawul-listed Artex Industrial Investment owns a 15% equity stake.