Permira, PAI top CVC bid for Cortefiel

CVC faces a battle for the €1.4 bn Spanish retailer with Permira, the firm it outbid for UK department store Debenhams in 2003.

CVC Capital Partners, the pan-European firm that launched a €1.4 billion ($1.7 billion) agreed bid for Cortefiel last month, now faces a rival offer for the Spanish fashion retailer according to press reports.


Permira and French firm PAI have outbid CVC by around 3 percent, offering €18.40 per share. The consortium’s bid, which has a total value of €1.44 billion, was filed with CNMV, the Spanish stock exchange regulator minutes before the expiry of the 45 day deadline set when CVC made its €17.90 per share bid in early May.


CVC’s offer had already been accepted by Cortefiel’s controlling shareholders, the Hinojos and Garcia-Quiros families, which between them own 55.7 percent of the company.


The situation is further complicated by an agreement between the two families and CVC that prevents shareholders from accepting a rival bid at under €19.30 a share, which makes it unlikely that Permira and PAI’s current bid would be acceptable.


Either bid would require backing from 75 percent of shareholders to be successful. Should CNMV approve Permira’s offer, the bidding process could be reopened, beginning an auction process to be decided by sealed bids.


Cortefiel operates a network of 1,200 stores in 37 countries under the Cortefiel, Springfield and Women’s Secret brands, making it Spain’s second largest retailer. Last year it made profits of €62.2 million on sales of €971.2 million. The company has been listed on the Madrid stock exchange since 1994.


As well as pipping Permira for Debenhams in 2003, CVC also reportedly beat the firm in the battle for Ruhrgas, the metering unit of German utility E.on, which CVC purchased for €1.5 billion last week.


The firms are not always on the opposite sides of the deal table however, having teamed up last year to acquire UK roadside assistance group the Automobile Association for £1.75 billion.