The 99-year-old co-founder of Godfreys is set to take control of the struggling vacuum cleaner retailer after two major shareholders agreed to sell their stakes to him.
John Johnston, who co-founded Godfreys in Melbourne in 1936, won over the shareholders after his family-owned Arcade Finance raised its all-cash bid from $13.1 million to $13.7 million.
NGE Capital, which holds a 15.13 per cent stake in Godfreys, and Kentgrove Capital, which has a 4.64 per cent stake, have both signalled their intent to sell their shares to Arcade.
Arcade spokesman Grant Hancock said this hands control to Arcade, which had voting interests in 40.9 per cent of Godfreys shares at the close of trade on Thursday.
"The Kentgrove and NGE shares will take Arcade's voting interest in Godfreys to more than 50.1 per cent, at which time we will make the bid unconditional," Mr Hancock said.
Arcade wants to de-list Godfreys from the Australian Securities Exchange and to operate it as a private company.
Arcade initially offered 32 cents a share for Godfreys in April before raising its bid on Thursday to 33.5 cents.
Shares in Godfreys were up two cents, or 6.5 per cent, at 33 cents by 1340 AEST on Friday.
Since listing in 2014 with an issue price of $2.75, Godfreys has been plagued by falling sales, multiple changes of senior management, and a sustained slide in share price to an all-time low of 21 cents in April.
Godfreys this month cut its full-year earnings guidance twice in two weeks and warned that it would likely breach loan covenants following a big fall in sales.
The retailer's latest forecast was for earnings before interest, tax, depreciation and amortisation of $3.5 million, compared to an earlier prediction that it would hit the lower end of its previously issued $5 million-$6 million guidance range.
Fierce competition from JB Hi-Fi and Harvey Norman, which stock the popular Dyson brand, and a failure to quickly spot the trend toward stick vacuum cleaners have contributed to Godfrey's troubles.