Takeover windfall for florists

Around 1,850 florists in the UK were today celebrating windfalls of up to £12,000 (€17,200) after backing the takeover of Interflora.

At an extraordinary general meeting in Birmingham, members voted 87.1% in favour of a £23.3m (€33.5m) takeover of the iconic flower delivery network by private equity group 3i.

It came despite a high-profile campaign by dissident florists opposed to the loss of overall control of Interflora, which has been a trade association since its establishment more than 80 years ago.

Management had backed the 3i bid after feeling the pressure of competition from high-street retailers including Tesco and Marks & Spencer. The group lost two million orders last year and has seen its market share plummet from 75% to around 27%.

But a change in the status of Interflora required the support of three-quarters of its stakeholders, who had opposed a similar move in a poll held eight years ago.

More than 85% of eligible members voted at the meeting today, giving management a strong mandate to start the process of modernising the business.

Under the terms of the deal, 3i will own around 65% of the business with the remaining interest held by those Interflora members who opted for shares.

But others are expected to accept windfalls of between £5,000 (€7,200) and £12,000 (€17,200), with the size of the payouts calculated on the length of membership and volume of business.

Interflora chairman Myra Williamson said: “I am delighted that such a large majority of our members have voted to accept this proposal.

“But we will not forget that some members have concerns about the incorporation and so we will continue to keep this process transparent and hope that they will feel as involved and accommodated as possible should we make this change of corporate structure.”

The deal with 3i will enable Interflora to borrow money more easily, embark on a modernisation programme and expand into new product areas.

Although flowers will remain at the heart of its business, Interflora is keen to offer customers the opportunity to send gifts such as teddy bears, champagne and chocolates.

The proposal from 3i was recommended at the end of a sale process lasting nine months because of the private equity firm’s reputation for building retail brands.

It is understood that 3i has pledged not to tinker with the individual brands of the flower shops or force them to open on Sundays.

The incorporation of Interflora still needs to be sanctioned by the British High Court and a hearing is scheduled to take place on February 4. Barring any last-minute hiccups, it would become effective four days later.