Mosaic Fashions to buy Rubicon Retail for £353 million |
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Fri, 23 Jun 2006 10:50
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LONDON - Mosaic Fashions hf, which owns the fashion chain Oasis, Karen Millen, Coast and Whistles said today that it has agreed to purchase Rubicon Retail, the owner of Shoe Studio, Warehouse and Principles, in a deal worth £353 million. If the takeover goes ahead, it would create one of the UK’s biggest fashion empires.
Mosaic Fashions which is listed in Iceland said that it had signed a “non- binding letter of intent” to acquire Rubicon. The cash and shares deal will be facilitated by Baugur, another Icelandic chain that has substantial shares in both the companies. Sir Philip Green’s Arcadia will be the top fashion chain followed by this new entity, which is expected to have total sales of £818.5 million spread across 1,700 stores in 27 countries.
Commenting on the deal, a spokesman for Baugur and Mosaic observed, "The deal makes sense in a lot of ways. The two businesses [Mosaic and Rubicon] are focused on the same market of young female fashion shoppers, but without much overlap. And they both use the same supply model." He added that the merged chain would have more opportunities for international expansion.
The merged company will retain the name of Mosaic Fashions and will be headed by Derek Lovelock, the chief executive of Mosaic. Don McCarthy, chief executive of Rubicon, and his finance director, Stefan Cassar are said to be special advisors in the new group.
"Rubicon has a strong portfolio of fashion brands which operate in a sector of the market that we know well," Mr Lovelock said. "The enlarged group would have successful and differentiated fashion clothing and footwear brands, excellent prospects for further growth and for enhancing value for shareholders," Mr McCarthy added.
Mosaic said that the deal would be subject to due diligence, but should be wrapped up in the next three months.
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