Baroness Retail, the private equity consortium comprising CVC Capital Partners, Texas Pacific and Merrill Lynch Private Equity, has emerged victorious in its efforts to acquire Debenhams with an increase to its recommended offer for the UK department store chain.
Baroness has offered 470 pence per share, valuing Debenhams at £1.72bn. The revised bid is at a 3.3 per cent premium to the syndicate's initial offer made in September.
This morning Laragrove, the consortium comprising Permira, The Blackstone Group and Goldman Sachs Capital Partners, said it would not be making a higher offer for the business. “Laragrove notes the new bid from Baroness and confirms that it will not be increasing its offer or participating in the bidding process scheduled to commence on 31 October 2003. The price offered by Baroness is in excess of the price which Laragrove was prepared to offer,” the consortium confirmed in a statement to the London Stock Exchange.
The winning offer comes just days after Goldman Sachs ruled itself out of a higher bid for Debenham, which cast doubt over Laragrove’s ability to come back with another bid.
The Baroness consortium brings together John Lovering, who was linked with an offer for UK supermarket chain Somerfield earlier this year, and Rob Templeman, chairman of UK auto equipment retailer acquired by CVC in 2002. Chris Woodhouse, deputy chairman of Halfords, has also joined the bidding team.
Texas Pacific and CVC each hold a 41 per cent stake in Baroness Retail, the acquisition vehicle set up to acquire Debenhams, with Merrill Lynch holding a 16.67 per cent stake. Debt facilities have been arranged and underwritten by Morgan Stanley and Credit Suisse First Boston.
Debenhams operates 103 department stores in the UK and Republic of Ireland and 10 international franchise stores located in Europe and the Middle East. For the year ended 31 August 2002, the group reported turnover of £1.7bn (2001: £1.6bn) and a profit before tax of £154m (2001: £146m).