The board notes that Sexyland’s takeover offer “is at a substantial discount” and that each board member disapproved of the deal to sell AdultShop.com shares for 93 cents (U.S.) a share and 0.66 cents for each option.
AdultShop.com’s board have asked for shareholders to take no action on the matter, according to a statement to the Australian Securities Exchange.
Sexyland owner Angelo Abela earlier this month cited AdultShop.com’s share price and profit underperformance as justification for a bid.
Online sex emporium AdultShop.com is owned by Malcolm Day, whose empire at one time was worth about $110 million.
In 2000, just a year after it was listed as a public company in Australia, AdultShop.com was worth $660 million. Now its market value is just $2.6 million.
Day said Australian laws, which made the sale of adult films illegal in most Australian states, had limited the growth of AdultShop.com.
Sexyland describes its ''success is attributed to its friendly yet professional customer service coupled with warehouse-sized stores which have been uniquely designed and decorated to make shopping at Sexyland a fun and exciting experience.''
Sexyland, according to the statement made to the Australian Securities Exchange, indicated that it will formally bid for AdultShop.com on Oct. 31, sending AdultShop.com shareholders a proxy statement in about three weeks.
Day told the Australia Sunday Times last month he was considering privatizing AdultShop.com and looking at new business ventures. He said he wanted to raise up to $1.2 million to fund possible acquisitions in the ``technology, industrial and resources industries.”
Day said the company could go as far as replacing its board and himself as director.
“My knowledge could assist in finding the right deal — bearing in mind we would employ independent experts anyway — but then when the company found a deal I would probably come off as a director,'' he said.
“We haven't made any hard decisions yet, we're just doing the rights issue in the first step and then we're going to have a look at what opportunities are around.”
