A group of Farfetch investors has appointed financial advisors to ‘urgently evaluate options’ following the take-private offer by South Korean e-commerce giant Coupang.
According to reports, the investors argue that the planned sale of the upscale online retailer “risks making it unviable for any other bidders to present an alternative, value-maximizing offer.”
The group – named “the 2027 Ad Hoc Group” – holds more than 50 per cent of Farfetch’s 2027 convertible notes worth over £ 780 billion. It has selected Pallas Partners as legal advice and investment bank Ducera Partners as financial consultants for its options.
In exchange for the Coupang agreement, which was revealed in December, the company gave Farfetch access to a £ 394.7 million bridge loan to keep the business operating. The retailer must become a Coupang subsidiary or repay the loan with interest at the rate of 12.5 per cent annually within the offer’s exclusivity period, which ends on 30th April.
The interest on the Farfetch-issued 2027 notes and associated debt will be eliminated if the deal closes. According to the 2027 Ad Hoc Group, there are other ways to obtain a higher price for the retailer’s assets, like breaking them up and selling them to interested parties.
A Farfetch spokesperson was reported as saying, “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.”
