New Look PTP overcomes abstentions

The £700 million public-to-private buyout of UK high street retailer New Look has been approved by shareholders despite a reported abstention from fund manager Fidelity.

Fidelity, the fund manager, is reported to have abstained from voting on the £700 million takeover agreed by shareholders in UK retailer New Look.

A report in the Independent newspaper said that Fidelity declined to proffer its 7.36 percent stake in favour of the deal. A source close to the transaction declined to comment on the actions of individual shareholders, but said that votes in favour totalled 62,430,561 compared with 57,934 against and 13,350,495 abstentions.

This means that around 17.6 percent of votes were not submitted, and a total of approximately 18 percent (together with the votes against) failed to support the bid. This meant the minimum acceptance level of 75 percent of issued equity capital was achieved.  

Fidelity, which is the largest institutional shareholder in New Look, is fast gaining a reputation for activism. Last year it refused to sell its stake into the public-to-private buyout of UK restaurant chain Pizza Express and was also in the vanguard of the campaign to oust Carlton’s Michael Green as chairman-designate of ITV.

The buyout of New Look is led by founder Tom Singh and supported by private equity firms Apax Partners and Permira, which will each own 30 percent of the privatised entity in exchange for investments of £100 million each. Singh will hold a 23 percent interest following the deal, while managing director Phil Wrigley will own eight percent.

The 348 pence per share offer represented a 36 percent premium to New Look’s share price of 255 pence on the day when news of the proposed take-private first broke. The offer was submitted under a scheme of arrangement, which enables a swifter conclusion than a bid under the Takeover Code and enjoys a small financial advantage relating to stamp duty.

Hypovereinsbank, HSBC and Credit Suisse First Boston have been instructed to arrange debt financing for the deal.