Goldman linked with Kingfisher swoop

Shares in Kingfisher soared today after reports that Goldman Sachs’s private equity arm is considering a bid for the company.

Goldman Sachs Capital Partners, the bank’s private equity arm, is reportedly preparing a bid for Kingfisher, a UK retail group with a market capitalisation of about £6.5 billion (€9.6 billion; $12.8 billion).

This morning Kingfisher’s share price climbed as high as 286.75 pence, a 52-week high, before settling back down later in the day. Shares are currently trading at 277.50 pence, up 7 pence for the day.

The heavy trading followed reports in the London-based Times newspaper this morning that Goldman’s buyout arm is considering a bid for the company, attracted by its £3 billion property portfolio, its market-leading position and its strong cash generation.

Kingfisher is the latest UK retailer to attract private equity interest, following the recent approaches to Alliance Boots and Sainsbury’s. The report comes after Kingfisher revealed that last year it managed to cut its net debt to £1.29 billion from £1.35 billion, while its property nportfolio had increased in value by 9 percent to £3.2 billion.

Goldman is likely to have substantial equity to invest in the coming months. Earlier this week chief executive Lloyd Blankfein admitted that its latest buyout fund, which is currently being raised, could top $20 billion.