Companies

Farfetch shareholders join forces to oppose the takeover of Coupang

Jan 30, 2024 United Kingdom

A group of Farfetch shareholders have come together to block South Korean e-commerce firm Coupang’s impending takeover of the luxury e-tailer, citing an untransparent sales process

A group of institutional investors holding more than 50% of Farfetch’s 3.75% convertible senior notes due 2027 demands immediate repayment of the company’s debt amid fears that a deal with Coupang will further erode the e-tailer’s value. The acquisition, announced in December last year and which included a 500 million US dollar bridge loan to keep Farfetch operating, is yet to be finalised but will wipe out all shareholders, including the company's employees.

As a result, the so-called “2027 Ad Hoc Group” has appointed Pallas Partners as legal adviser and investment bank Ducera Partners as financial adviser to “urgently evaluate options to protect its interests in the face of the value destruction that it believes will be effected should the Coupang sale go ahead”.

The “Ad Hoc Group” accuses Farfetch of a lack of transparency about its cash problems. Last August, the company predicted it would end 2023 with 800 million US dollars in cash, but four months later it sought a bailout. It also claimed that the terms of the deal between Coupang and Farfetch made it unviable for other bidders to make an alternative offer.

“Allowing this transaction to complete fails to maximise the value of the assets of the company, at a time when at least three other credible parties were publicly reported to be interested in all or parts of the business. The group is urgently considering appropriate next steps”, concluded a spokesperson.

Image Credits: retailgazette.co.uk

United Kingdom United States Acquisitions Companies ecommerce Farfetch Luxury