New Look set for £2bn secondary sale

Permira and Apax Partners have reportedly decided to sell rather than float their £2 billion-rated UK fashion retailer New Look, after the company’s management expressed a preference to remain privately-owned.

Buyout firms Permira and Apax Partners are reportedly preparing a £2 billion (€3.0 billion; $3.9 billion) secondary sale of UK fashion retailer New Look, after rejecting an earlier plan to float the business on the London Stock Exchange.

The Financial Times reports that New Look has appointed Merrill Lynch to conduct the process, which it hopes to complete in a matter of weeks. The sale is likely to attract attention from most of the leading private equity firms, with Kohlberg Kravis Roberts, Bain Capital, CVC Capital Partners and Warburg Pincus just some of the firms already linked with a possible bid.

Apax and Permira bought New Look in 2004 for £699 million, and have since been able to double its retail space. The two firms have already doubled their initial investment after refinancing the business twice, and could share about £1.2 billion more when the sale completes.

The FT reports that the company’s management preferred to stay private as it concentrated on international expansion, and this suited the two owners as it would allow them to cash in on their entire investment. If they floated the business, they would be expected to retain a small stake to reassure investors.