Shares in Majestic Wine fell on Thursday following the abrupt departure of its chairman and as a lack of details about the sale of its retail outlets and a dividend suspension spooked investors.
Majestic, which has been struggling with competition from discounters and online rivals, said it was in advanced talks with multiple bidders over the sale of its 200 outlets as it focuses on its own online Naked Wines brand, but gave no further information.
The company's shares jumped sharply on Wednesday after Sky News reported that activist fund Elliott Advisors had launched a bid for the stores but fell as much as 8.5% on Thursday.
A decision to suspend the final dividend due to the sale also weighed on the share price, although the company said a payout of the same amount would be made, contingent on the completion of the sale.
"The dividend is being suspended due to the sale of Majestic and a focus on Naked. This needs further explanation," said lead Liberum analyst Wayne Brown.
Chief Executive Rowan Gormley told Reuters the rationale behind the dividend suspension was to take a "conservative" stance with the company's cash. He said Majestic would invest heavily in the expansion of Naked Wines, particularly in the United States, and spend more on digital marketing.
Chairman Greg Hodder will step down at the end of August and John C. Walden was named as a non-executive director and chairman designate.
"The highly regarded Chairman has resigned, and whilst replaced with another credible candidate, it is an unexpected surprise," Brown said.
Majestic said if it does not complete the proposed sale over the summer, it will continue to run the retail business independently through the December holiday season before restarting sale talks in 2020.
The company, which plans to rename itself Naked Wines Plc, reported adjusted pretax profit of £11.3 million for the year ended 1 April, missing the average analyst estimate of £12.75 million.
A weak pound pushed up the price of importing wine, which, combined with shaky consumer confidence, hurt the company's UK operations and margins, said Gormley.
The Naked Wines business, which Majestic acquired in 2015, reported a 14.5% rise in sales for the year ended 1 April, while revenue at its retail division grew only 1.5%.