A 1.6 billion bidding war for Debenhams could be just days away after it confirmed venture capital groups CVC Capital and Texas Pacific had entered the fray.
Chief executive Belinda Earl faces the awkward task of working with two bid teams after opening talks with Permira, the buyout firm that made an estimated 450 million profit selling Homebase earlier this year.
Permira tabled an indicative takeover offer of 425p per share in May and has been allowed to consult Earl and finance director Matthew Roberts.
The courtesy has also been afforded to CVC and Texas, but this has done little to ease concern about potential conflicts of interest. Earl could pocket 3 million from cashing in shares and options.
Debenhams today said like-for-like sales grew 3.8% in the first 20 weeks of the second half of its financial year. This was fuelled by a 5% leap in the latter 10-week period. The gross margin was up 0.6%.
The group’s independent directors will eventually decide who buys the department stores group. City analysts said today’s sales figures showed the asking price should be closer to 450p per share – 1.63 billion.
Richard Ratner, retail analyst at Seymour Pierce: “They have massively outperformed other department stores and our view is that the bid price has to be about 450p.
“Shareholders deserve a premium for this one.”
