Mercantile NZ Ltd. has upped its takeover bid for iconic Kiwi department store, Kirkcaldie & Stains, to $3.00 per share and has extended the offer to June 12.

Company chair Ron Brierley said the increase will also apply to those shareholders who have already accepted Mercantile’s earlier offer. The new offer is marginally above the director’s low estimate of $2.99 per share.

“That estimate is now very relevant as a result of the Petone lease deal falling over and Kirks being on the hook for a payout nearly $1.5 million over the next seven years,” Brierley stated.

Liquidation is more than a year away and, if it becomes controversial, costs could skyrocket above the $100,000 provided.

“We sympathise with those shareholders who have a warm affection for this fine old, iconic Wellington company, which would be severely disrupted if Kirks was forced into liquidation,” said Brierley. “In the absence of a higher offer, our recommendation is to accept our offer before it closes, unless extended, on June 12.”

On February 26, Kirkcaldie & Stains received a takeover notice from Mercantile NZ Limited to purchase 100 per cent of its ordinary shares for $2.75 in cash per share. The company, on April 1, issued a target company statement in relation to the offer with a recommendation to shareholders to reject it. The directors estimated in the target company statement that a residual value of $2.99 to $3.49 per share could be achieved on winding up Kirkcaldie & Strains.

Kirkcaldie & Stains, which made provisions of $1.74 million onerous contracts for leases in its accounts for the six months ending February 28, is facing a $1.3 million cost for future lease payments of its warehouse and office space in Petone, Lower Hutt. The company negotiated with the landlord of the Petone premises on February 28 to exit their lease before its April 30, 2023 expiry date on the condition the landlord would be able to sell the property. But on April 1, Kirkcaldie & Stains were advised the landlord failed to sell the building.