Brown & Jackson holds off from Allied bid battle

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The Independent Online
BROWN & JACKSON, the Poundstretcher retailer, restated its interest in acquiring the struggling Allied Carpets retail group yesterday but said it would not get involved in a bid battle with rival suitor Wassall.

Reporting buoyant annual profits and a return to the dividend list after six years, Brown & Jackson said it would meet the Allied Carpets board next Tuesday to discuss its approach. However, the company's chief executive, Johan Visser, said he would only proceed if granted detailed financial information. "We are not going to gamble with shareholders' money. If I wanted to gamble, I'd go to a casino."

Mr Visser said he was not deterred by Wassall buying Allied Carpets shares at 58p when Brown & Jackson's indicative offer is 50.5p. "My offer is on the table. Until I can see what is going on in the business I will not change it," he said. He added that he has not ruled out raising his offer price or launching a hostile bid.

Allied Carpets shares rose another 4.5p to 61.5p yesterday, valuing the company at pounds 56.6m.

Next week will also see the Allied board meet Wassall, the industrial holdings group which is turning itself into an investment specialist. Wassall is now the largest equity holder in Allied Carpets, with a 14.9 per cent stake, having acquired a major part of Jupiter Asset Management's holding on Wednesday. Brown & Jackson has so far acquired no Allied Carpets shares.

Brown & Jackson, itself a retail struggler just a few years ago, yesterday continued its remarkable renaissance with annual profits up from pounds 8.8m to pounds 22.2m and its first dividend since 1993.

The group now has 521 stores, having opened 47 in the period. Group like for like sales rose by 2.3 per cent with strong performances at Poundstretcher and at What Everyone Wants. Current trading is even stronger, with comparable sales up by 13 per cent in the first seven weeks of its current financial year.

Mr Visser confirmed his interest in expanding the group's range of interests beyond its existing discount operations. If the Allied Carpets deal falls through, he said other options may also emerge.

"Our strategy is now on the table. We might find people coming to us."

The Allied Carpets board has been criticised by some of its leading institutional shareholders for trying to insist on an agreed bid.

The Allied board will present its strategy - which has been developed by its new chief executive, Geoff Brady - to institutions next week.

"We want to establish what the valuation issues are," the company said.