London-listed retail and leisure business CI Traders has accepted a £260 million (€387 million, $520 million) offer from a consortium that includes buyout firm Duke Street Capital, real estate investor Europa Capital and HBOS.
The consortium will pay 100 pence a share for the business – an eight percent premium to CI Traders’ closing price yesterday.
CI Traders owns around 200 properties on the UK Channel Islands, including Marks & Spencer franchises and Safeway supermarket stores. Chairman Tom Scott, who is selling his 16 percent stake to the consortium, has agreed to buy £70 million of property from the company and will lease back one third of this under the terms of the deal.
As part of the agreement, Tony O’Neill will take over from Martin Bralsford as chief executive of the group. O’Neill was previously a director at Somerfield, the supermarket chain owned by Apax Partners.
CI Traders has previously rejected a take-private offer from another buyout consortium, led by London-based Alchemy Partners, which offered 85 pence a share for the business in October 2005.
Duke Street has recently been thrown into the centre of the UK debate over private equity, after the firm was criticised for job losses at portfolio company Burton’s and creditor losses at Focus DIY. Managing partner Peter Taylor has been asked to appear before the Treasury Select Committee next Tuesday.
Alchemy Partners founder Jon Moulton will also be appearing alongside Taylor on Tuesday.
CI Traders shares were up 6.2 percent yesterday, giving the company a market capitalisation of £246.3 million.