The battle for control of Debenhams took a new twist today as a consortium led by CVC Capital Partners upped its recommended offer for the department store group to £1.72bn (€2.4bn).
Baroness Retail, which also includes Texas Pacific Group, is effectively bidding against itself by tabling the new offer, which tops a £1.66bn (€2.3bn) bid that it made last month.
It represents a 3.3% premium to the consortium’s original 455p-a-share proposal and a 10.6% improvement on the £1.5bn (€2.1bn) offered in July by rival bidder Laragrove, which includes private equity group Permira and Debenhams’ management.
Laragrove now faces having to decide whether to table a new proposal before the October 31 deadline set by the Takeover Panel.
Baroness Retail said today it had agreed its improved offer, which values Debenhams’ shares at 470p each, with the store group’s independent directors.
It represents the latest development in a takeover saga that has been running since May, when Debenhams revealed that it had received a takeover approach from Permira.
After intense discussion, the store group finally recommended that £1.5bn (€2.1bn) offer to shareholders in July in the absence of a higher bid.
It freed Debenhams’ management team, led by chief executive Belinda Earl, to work with Laragrove.
The news comes after Debenhams revealed earlier this month that it had delivered profits in line with City forecasts.
The group reported a 9.6% rise in underlying profits to £168.4m (€241m) after what it described as a “volatile” year for retailers in which trading conditions had changing from month to month.
Total sales grew 6.7% to £1.81bn (€2.5bn) in the 12 months to August 30 – up 3.7% on a like-for-like basis.
In the full year results statement, chairman Peter Jarvis praised the management for delivering a strong trading result while simultaneously co-operating with the two rival bidders as they formulated offers for the high street chain.