Brantano-Mitiska merger cancelled

The Board of Directors of Belgian discount shoe retailer Brantano has decided to cancel its merging plans with holding group Mitiska. Brantano announced the news on Monday in a brief press release. Last Saturday Belgian newspaper Standaard wrote that the two companies had postponed the merger, but now the move has been completely annulled.

Brantano shares, which had been suspended by Euronext Brussels pending the news, were up 9.3% at EUR 17,50 after trade resumed. Brantano chief executive Kurt Moons told Reuters that the board doubted that it could generate investor interest in a share issue that they had planned to make after the merging, given the poor market conditions.

The fusion, which was announced in December last year, has been the object of debate for some time. In January KBC securities was hired to investigate the possibilities of a possible merger. After this investigation both companies would decide weather or not a fusion would be profitable. Proceeds of the union would be used to support Branato's foreign expansion plans and to reduce Mitiska's, which owns 42 per cent of Brantano, debt.

After careful consideration and given the current situation on the financial market Brantano has now decided to cancel the project. In a brief statement Brantano said: "The Board of directors is convinced that the Brantano Group has sufficient means to continue its strategy on its own."