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Retail round up - The Sunday papers
Archived article dated Sunday March 2nd 2008
Dreams in £200m beds deal, Gee hatches plan for Moss bros, Rivals Coop and Asda line up for Somerfield, Moss Bros chairman hits back at family
The Sunday Telegraph
The founders of Dreams are poised to land an estimated £200m windfall by selling the business into private equity hands. Mike Clare, Dreams' chairman, and his wife Carol, are on the verge of agreeing a deal with Exponent Private Equity, which owns the Radley handbags and accessories business, to back the chain's current management in a buyout that would catapult the Clares into the ranks of Britain's wealthiest couples. Exponent is understood to have lined up the former chief executive of the Dixons Stores Group, John Clare - who is no relation to the Dreams founders - to become the group's chairman once a deal is completed. Last week, Dreams released figures showing that sales during 2007 soared by 27 per cent to just under £200m, with profit up 88 per cent to £13.3m. Mike Clare said last night that no deal had yet been agreed with Exponent and insisted three potential buyers remained in the frame. "I might decide not to sell at all," he said. Exponent and Dreams' advisers, KPMG Corporate Finance, declined to comment on the sale.
The Sunday Times
One of the family shareholders in the Moss Bros menswear chain is hatching an audacious plan to block an indicative 42p-a-share takeover bid from Baugur. Michael Gee, a former Moss Bros director and member of one of the founding families of the chain, has sounded out bankers at HSBC about raising finance to buy at least 20% of the 29% stake owned by the Baugur-backed Unity investment group. He is expected to offer a premium price of about 50p a share. Gee family members already control about 8% of Moss Bros shares, so if they could strike a deal to buy 20% of Unity's stake, that would lift their holding to just below the 29.9% threshold that would force them to make a bid for the whole business under Takeover Panel rules. If the share plan fails, Gee told The Sunday Times that he planned to call an extraordinary general meeting to oust the Moss Bros chief executive Philip Mountford and install new management.
Coop and Asda are the front-runners to buy grocery chain Somerfield after both tabled bids for the whole business. But with competing offers understood to be well below the £2.5 billion sought by shareholders, it is increasingly likely the Bristol-based company will be broken up. Somerfield's shareholder consortium - private-equity groups Apax, Barclays Capital and Robert Tchenguiz - is believed to be eager to sell the previously loss-making company as a whole. Industry sources are sceptical about whether Asda or Coop is interested in acquiring all Somerfield's stores and suggest that the low bids could be a tactic to force a break-up of the group. Fortunes at Somerfield have begun to look up after the business posted pretax profits of £23.4m for 2007 against a loss of £118.1m during the previous 12 months.
The Observer
Moss Bros chairman Keith Hamill has rounded on his critics, after family shareholders accused him of failing to defend their interests in the proposed takeover by Icelandic investment group Baugur. 'The independent directors received an offer and decided to take action,' said Hamill. 'We believe it is appropriate for investors to receive an offer so they can make up their own minds.'He was speaking out for the first time since David Moss, whose family owns 18 per cent of the shares, described him as a 'semi-detached chairman who did not have the vision to defend the business'. Moss added: 'The family wants a strong chairman who can look at the terms of the Baugur bid and defend the company if that is the right thing to do.' Hamill, who is due to retire in April after seven years in the chair, argues that deadlock between the founding Moss and Gee families, who together own 27 per cent, and Baugur, which has 29 per cent, had made it impossible to take strategic decisions. 'It is not a normal share register,' said Hamill. 'The families are not aligned and we would be supportive of a bid, given the difficult situation. It is no way to run a business and push through the change needed.'
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