Argos chief vows to fend off pounds 1.6bn GUS hostile bid
Saturday 14 February 1998
Stuart Rose, who was only appointed earlier this week, said he was confident that Argos could confound its critics and escape GUS's clutches. "This is not a done deal at all. We have the makings here of a very strong fight. I'm up for it and I hope we will enjoy ourselves in the process. This business will not be sold on the cheap."
His comments came as Argos shares drifted 14p lower to 611p compared to the GUS offer price of 570p. The fall was attributed to fading hopes of a white knight intervention and comments from analysts that GUS may not have to raise its bid by much to clinch victory. GUS shares closed 2p higher at 750p.
GUS's offer document is expected to underline the views of Lord Wolfson, the company's chairman, that Argos is facing increased competition, increased demands for improved service and that GUS can help Argos achieve its home shopping and ambitions with far lower costs.
Mr Rose denied that after less than a week in the business, he could hope to offer little more than a straightforward defence on the grounds of price and the possible return of funds to shareholders. "I have had enough time to get around the business and am very encouraged by what I've seen. This business has had just one difficult year. It is not about to collapse around our ears."
He admitted that the Argos management may have taken its eye off the ball in recent months. "There is a danger that when a business has been as successful as this one has that your eyes are sometimes not as open as they should be."
He said the company would continue with its plans to start a home shopping trial later this year. It is also possible that the company will consider developing a database on the shopping habits of its 14 million customers. "I have an open mind on it," he said.
Although Bob Stewart, Argos' finance director, last week questioned whether a database would be of much use to Argos, Mr Rose is thought to be interested in the possible uses of customer information for cross-selling of other products and the more efficient targeting of marketing material. "It would be timely to review our attitude to databases," he said.
GUS's offer document is likely to focus on the key points made in its original offer announcement and underline the weakness in the Argos share price.
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