Australian Investment Blog

ASX:BWX 17/09/2018

Management bid for (ASX:BWX) falls over

Stock

BWX Limited (ASX:BWX) $4.05 as at 17/09/2018

Event

Skin and haircare product company (ASX:BWX) has been volatile today after they announced that their hostile management takeover bid had fallen over. The company, which owns brands such as Sukin & Mineral Fusion, had faced a bid from the MD John Humble & Finance Director Aaron Findlay along with private equity firm Bain Capital at $6.60 in May, however a binding proposal has failed to eventuate and the parties have walked away from the table. Both John & Aaron have left the company as a result of the hostilities. In the announcement, the company reiterated FY19 expectations looking for revenue growth across all brands, while the board welcomed the removal of this distraction where the “management’s time is better spent focussing on the substantial growth opportunities.” The stock was down strongly early in the day before rebounding and trading higher around midday, although all gains have been given back to trade ~1% lower. BWX Chart

Market Matters Take/Outlook

We struggle to see upside in BWX. It is operating in a crowded industry, it tries to grow its organic skin and hair care brands. It looks to be shaping up for acquisitions to shore up diverse product and supply lines requiring capital. The failure of a bid to eventuate could signal a number of issues. Especially as the data room was available to any interested party. It could mean performance has been poor since the announcement in May. Or any number of other underlying issues are stirring beneath the surface.

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