A group of investors behind Farfetch are concerned over the “value destruction” as a result of Coupang’s acquisition of the global ecommerce giant and have appointed advisers to evaluate their options.
The Ad Hoc Group has appointed financial adviser Ducera Partners and Pallas Partners as legal counsel to “urgently evaluate options” to protect the investors’ interests in the business should the Coupang acquisition go ahead as planned.
The group said they are “seriously concerned by the rapid and unexplained deterioration in the financial position of Farfetch between August and December 2023”.
Farfetch’s investors are said to believe “better value for the assets” could be gained by routes other than a sale, including a break-up sale to other interested bidders.
With $1trn (£790bn) assets under management between them, the group holds more than 50% of Farfetch’s 3.75% of convertible senior notes debt security due in 2027.
The convertible security notes, which is a form of debt security for the business, have been declared a default by the group and they are “immediately due and payable in full”. This comes as a result of Farfetch delisting from the New York Stock Exchange as part of the deal.
A spokesperson for the Ad Hoc Group said: “The group believes this process sets an incredibly dangerous precedent.
“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.”
This comes after it was announced in December that Coupang had acquired Farfetch and was set to inject $500m (£394.8m) in emergency funding into the business.