Private Equity News & Analysis

Apax linked to New Look buyout

Tom Singh has reportedly held talks with Apax Partners about the backing of an offer for the UK fashion retailer he founded.

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UK fashion retailer New Look is expected to become the subject of a buyout approach from company founder Tom Singh who reportedly he has held talks with UK private equity firm Apax Partners.

 

In a statement to the London Stock Exchange, Singh announced that he appointed Deutsche Bank to review options for his 28 per cent stake in the business. UK newspaper The Daily Telegraph reports that Singh is planning to reduce his stake in the business via a management buyout through which he will sell part of his stake to Apax Partners.

 

Apax Partners declined to comment.

 

New Look shares have increased sharply since the turn of the year from a low of 205 pence to their current value of 305 pence. They closed at 307 pence per share on Friday, giving the company a market capitalisation of £615m.

 

Singh is thought to favour a take-private deal for the business in order to enable the company to expand its range of products aware from the glare of the public markets.

 

New Look, which reported pre-tax profits of £85.2m on sales of £643m in the year to 31 March 2003, has 492 stores in the UK and an additional 177 outlets in France. New Look opened 39 new stores during 2002, of which five were located in the UK and the remainder in France.

 

New Look was founded by Tom Singh in Taunton, Somerset, in 1969, and floated on the London Stock Exchange in 1998. The company’s first French store was opened in 1988. In 2000, New Look sold a 49 per cent stake in its French stores to rival retailer Mim, retaining a 51 per cent stake.

 

Last week Apax was also linked to a management buyout of home goods unit La Brosse & Dupont, part of the LVMH empire. The firm is thought to be bidding against ABN Amro Capital for the business, which is valued at E150m and forms part of LVMH’s strategy to focus on its luxury brands.

 

Also in France, Apax last week confirmed that it had sold its stake of over 20 per cent in French drug manufacturer Effik. Apax, which backed Effik as a start-up in 1994, declined to reveal the value of the transaction or the identity of the bidder.