Budget clothing retailer Peacock announced on Monday that it has agreed to be bought out at 404.4 million pounds. U.S. hedge funds Och-Ziff and Perry Capital, and Echelon, the investment vehicle of former chairman John Lovering are offering a recommended share price of 340.5 pence. It is being further financed by investment bank Goldman Sachs.
Peacock Chairman Gavin Simonds said: “Given the fact that the high street has got considerably colder since this bid was originally announced in August, not only have we not had a price-chip, but the price has actually gone up.” He added: “The original approach was made at 330 pence-a-share”.
Cardiff-based Peacock owns the Peacocks, Bonmarche and Fragrance Shop chains. It mentioned earlier this month that it was performing well despite the tough retail trading conditions. Its sales reported a 6.1% rise in the 13 weeks leading to October 1. It owns over 700 stores across the UK.
Other UK retail chains including Arcadia Group Plc, New Look Group Plc and Debenhams Plc have been acquired in the last three years.
Nick Bubb, an analyst at Evolution Securities in London, said: "The way in which retailers like Arcadia and New Look were allowed to be bought too cheaply ought to make investors wary. But in the current gloomy climate, most investors will be pleased if the planned MBO bid proceeds at the level announced today."
Peacock's Bonmarche chain has reported sales below expectations this month. According to the company, it was “somewhat less optimistic” about the results for the fiscal year ending in March 2006.
Shares of Peacock rose 7.5 pence to 334.25 pence at 9:15 a.m. in London on Monday. They extended their gain this year by 23 percent.
Posted
on : Tue, 01 Nov 2005 06:45 GMT | Business News
By : Mike Lawson
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