The conditional takeover offer of 32 cents per share was made on Monday, prompting an increase of more than 42% in Godfreys shares to 30 cents today.
Recommendation to shareholders
In response to the offer, Godfreys, a vacuum and cleaning retailer, recommends that shareholders take no further action until the board has given further guidance.
Godfreys will appoint an independent expert to provide an opinion as to whether the offer is fair and reasonable.
In a letter to Godfreys shareholders, Arcade director John Johnston explained that he and Godfrey Cohen had co-founded Godfreys in the 1930s and he had been a strong supporter to the company.
He said the offer was highly attractive and represented compelling value for Godfrey's shareholders.
52.4% premium to Godfreys April 6 closing price
The offer represents a premium of 52.4% to the closing price of Godfreys shares on April 6, the last day of trading before the takeover announcement.
It also represents a 15.5% premium to the VWAP of Godfreys shares since February 20, which was the date Godfreys released its half year results and a 25.5% premium to the 1-month VWAP of shares up to and including April 6.
Arcade had an interest of 28.09% in Godfreys as at the date of the takeover offer on April 9.
Johnston said Arcade believed that the restructuring required to restore Godfreys value would be best carried out in an unlisted private company environment.
Arcade, therefore, proposes to remove Godfreys from the ASX official list upon acquisition.