Safilo Withdraws From Race to Acquire UK Eyewear Group Inspecs

Safilo Group has formally withdrawn from the contest to acquire UK-based Inspecs Group, clearing the path for a consortium led by prominent British entrepreneurs Luke Johnson and Ian Livingstone to complete their £85.4 million (AU$172 million) takeover of the Bath-based glasses maker.

Safilo announced on 15 December that it does not intend to make a firm offer for Inspecs, following the company's disclosure on 10 December that Bidco 1125 Limited had proposed a recommended acquisition at 84 pence per share.

The decision means Safilo will be bound by restrictions under Rule 2.8 of the UK's City Code on Takeovers and Mergers, preventing the company from making an offer for Inspecs for six months. However, Safilo has reserved the right to set aside these restrictions under specific circumstances, including if a third party other than Bidco 1125 makes a firm offer, if Inspecs announces a Rule 9 waiver proposal or reverse takeover, or if the Takeover Panel determines there has been a material change of circumstances.

Consortium's Winning Bid

The successful bid from Bidco 1125, a vehicle indirectly owned by Johnson and Livingstone, values Inspecs' entire issued share capital at approximately £85.4 million (AU$172 million) on a fully diluted basis. The 84 pence per share cash offer represents a substantial premium of 107 per cent to Inspecs' closing price of 40.5 pence on 22 October, the day before the possible offer was announced.

Johnson, who chairs private equity firm Risk Capital Partners, has an extensive track record in retail and hospitality, including previous roles as chairman of Pizza Express during its rapid expansion in the 1990s and more recently as an investor in bakery chain Gail's. Livingstone co-founded London & Regional Group, a global portfolio of commercial real estate and hospitality assets worth over £10 billion (AU$20 billion), and brings significant experience in the optical industry, having previously chaired the Optika Clulow retail chain, which operated more than 200 optician stores.

Inspecs Board Unanimously Recommends Deal

The Inspecs board has unanimously recommended the acquisition to shareholders, who will also have the option to elect for an alternative offer comprising unlisted shares in the acquiring entity's parent company Topco 1125 Limited and loan notes. This structure allows shareholders to maintain an economic interest in the business going forward.

Directors controlling approximately 19 per cent of Inspecs' shares have irrevocably committed to vote in favour of the scheme. As of the announcement, Bidco had already secured acceptances representing 31 per cent of Inspecs' voting rights.

The acquisition is expected to complete during the first quarter of 2026, subject to court and shareholder approvals. Following completion, Inspecs will be delisted from the AIM market and re-registered as a private company. The AIM market (formerly Alternative Investment Market) is a sub-market of the London Stock Exchange (LSE) designed for smaller, high-growth companies needing easier access to public capital with less stringent regulations than the main LSE market.

Challenging Market Conditions

Inspecs, which completed its AIM IPO in early 2020, has faced significant headwinds in recent years. The company has grappled with weak consumer demand in continental Europe, particularly in Germany where the impact of the war in Ukraine has been most pronounced, and experienced a significant reduction in sales to GrandVision following its acquisition by EssilorLuxottica.

The business has also faced disruption from increased US tariffs on goods produced in its main manufacturing locations in China and Vietnam. Additionally, Inspecs discontinued its loss-making Norville lens manufacturing site this year due to insufficient scale.

The consortium believes that operating as a private company will provide the most effective environment to unlock Inspecs' full potential. Free from the constraints of maintaining a public listing, the company would gain greater financial and strategic flexibility to pursue long-term initiatives aimed at maximising sustainable growth.