Apax Partners is planning a bid on House of Fraser |
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Mon, 27 Feb 2006 17:00
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LONDON: Private equity fund Apax Partners is reported to be planning a 300-million-pound bid for department store chain House of Fraser. The retailer confirmed Friday it had received a preliminary approach, but did not name the party.
Sources said Apax has approached the board of House of Fraser, but details of the proposal were not known immediately. House of Fraser had been a takeover target since 2002 and several offers have been made, including one by Scottish businessman Tom Hunter.
The retail chain, Britain's third largest, has 61 stores and 650 million pounds in annual sales. The company had reduced its debts through a series of sale and leaseback deals. It has also renegotiated its store card arrangements with GE Capital, which will ensure an inflow of cash.
The firm was forced to put up a statement confirming the approach after its share price escalated by nearly 4.2 per cent in a day Friday. While it did not name Apax, sources confirmed that the private equity company is involved and has teamed up with Barclays Equity and Robert Tchenguiz.
Apax, one of the world's largest private equity firms with 20 billion pounds in cash available with it, had recently acquired fashion house Tommy Hilfiger, whose products are mainly sold by the House of Fraser chain, in a 917-million-pound deal.
Like other retailers, House of Fraser has been facing tough competition and the slowdown in consumer spending has affected it adversely. It had made a loss of 3 million pounds in the first six months of the current fiscal, though its year-end festival sales have been above expectations. It has bought in 2005, the Beatties chain and the Edinburgh store Jenners. It has also closed down several stores, including Dickins & Jones on London's Regent Street.
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