Baugur reportedly in takeover talks with House of Fraser

Baugur reportedly in takeover talks with House of Fraser

	Published : Tue, 02 May 2006 10:55 By : Amy Watts Print this Story

LONDON - The House of Fraser has confirmed that it has received a takeover approach from a potential buyer. However UK's third largest department store group did not name its suitor, but only said that any talks were preliminary.

"The board of House of Fraser notes recent press speculation and confirms that the company has had a very preliminary approach that may or may not lead to an offering being made for the company," the group said in a statement. "There can be no certainty that an offer will be made nor as to the terms on which any offer might be made." Newspaper reports are speculating that HoF's suitor is none other than Icelandic investor Baugur, which had confirmed that it now has a 10 percent stake in House of Fraser.

The Times reported that Baugur chief Jon Asgeir Johannesson was behind this acquisition move. Baugur already has noteworthy stake in other UK stores including Hamleys toy stores and Woolworths. In 2003, Baugur built up a 21 percent stake in the House of Fraser, but sold it shares in the following year.

In recent years, the company has been on shopping sprees in the UK and was a part of the consortium that had offered £311 million for Wyevale Garden Centers. Baugur appears to be determined to follow its acquisition policy even though many Icelandic investors are keen to cash in on their stock.

House of Fraser was in talks with Apax earlier this year, but the talks collapsed. The company was formed by James Arthur and Hugh Fraser in 1849. It has 60 stores across the UK and has increased its presence courtesy the takeover of Jenners in Scotland and Beatties in Birmingham.

House of Fraser reported a 4.6 percent increase in annual profits to £27.3 million last month.
Meanwhile, The Daily Telegraph reported that Sir Tom Hunter, the Scottish retail entrepreneur is interested in joining Baugur for the House of Fraser bid.