Allders agrees pounds 160m SwissAir duty-free deal

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The Independent Online
One of the City's more curious takeover sagas appeared to have to run its course yesterday when Allders, the department store group, agreed to sell its international duty-free operation to SwissAir for pounds 160m.

SwissAir's offer, tabled two days ago, trumped an improved pounds 145m bid from BAA made earlier on Wednesday.

The bid battle for Allders International began in earnest last month when airport operator BAA made a recommended pounds 130m offer for the duty- free business. Then SwissAir stepped in, saying it would pay pounds 145m, but there was initial confusion about the status of SwissAir's bid, from its Nuance International unit, with Allders saying it was not a firm offer.

However, Tony Collyer, Allders' finance director, yesterday defended the company's handling of the bid, which had raised questions about management's fiduciary duty to get the best offer for shareholders.

"Our concern was that we ended up with a firm deal but until yesterday we only had that opportunity with BAA," he said. "We could not recommend something to our shareholders that was only in the media."

Allders' decision to turn tail and back the SwissAir bid depends on shareholders voting against a resolution approving BAA's lower offer at an extraordinary general meeting on Monday. This should be a formality as BAA has already indicated it will not make a higher offer. Allders will then have to call another egm, probably early next month, to approve the SwissAir deal.

Last night BAA sought to hide its disappointment. A spokeswoman said "other options" in the duty-free area were being examined, though she declined to elaborate.

The bizarre auction has been good news for Allders shareholders, who saw the group's shares rise a further 4p to 210p yesterday.

Although duty-free shopping could disappear in Europe in 1999, SwissAir is confident about prospects for the fast-growing airport retail market. In particular, the Swiss group notes that store rental agreements are also due for re-negotiation in three years' time and that the new deals would reflect any European Union decision on duty-free.

SwissAir came in for strong criticism from some sections of the City for changing the value of its offer for Allders International on about half a dozen occasions. Estimates of how much it was prepared to pay ranged from pounds 120m-pounds 200m.