Interflora set for second takeover

Interflora today looked set to change hands for a second time in 18 months after management backed its sale to a US-based trading partner for £65.7m (€94.7m).

Investment group 3i, which is selling the business to floral services group FTD, bought a 65% stake in Interflora for £21.7m (€31.3m) in January 2005.

At the time of the 3i deal, 1,800 members who gave up control of their trade association received average windfalls of £12,000 (€17,000), which they could take as cash or reinvest in the business.

Those that kept shares in the business are likely to be rewarded with an estimated three-times return on their investment after a sharp trading improvement culminated in the proposed sale of the business today.

As part of the previous agreement to sell the majority stake to 3i, trading members have the right to match any offer made for the business. The Florists Advisory Committee is in the process of evaluating its position.

The deal backed by the Interflora board today strengthens the ties between Interflora and FTD, who have been close trading partners for more than 80 years and are co-owners of the famous Interflora trademark with one other party.

FTD said it planned to use the deal as a springboard for expansion into Europe.

Since the 3i deal, Interflora said it had already achieved the goals that it thought last year would take three years.

The sale in 2005 enabled Interflora to borrow money more easily, embark on a modernisation programme and expand into new product areas. Although flowers remained at the heart of its business, Interflora members were able to branch into new product areas.

Interflora chief executive Steve Richards said the business had made “impressive progress” in strengthening its member network, including through marketing, retail skills assistance and a shop refurbishment programme.

He added: “Performance has been strong and we are committed to working with our members to grow the business further.”

FTD said Mr Richards would remain in his post and manage the company as a stand-alone entity.