Country Casuals boss ponders bid

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The Independent Online
Country Casuals, the troubled womenswear retailer, faced fresh controversy yesterday when it emerged that its chief executive Mark Bunce is in talks which may lead to an offer for the company.

It is the second time in just 18 months that the retailer has been the subject of takeover interest from one of its directors. John Shannon, the group's former chief executive failed in a bitter pounds 27m takeover battle for the company just 18 months ago.

His offer was valued at 140p per share. Last night Country Casuals shares closed up 7.5p at 102.5p.

Mark Bunce and his wife Christina, who is commercial director, led a management buyout of Country Casuals from Coats Viyella in 1989. They still retain 10 per cent of the stock but the proposed level of their offer is not yet known.

Their main interest would be the core Country Casuals chain, which is profitable. The group is already in the process of selling its loss-making Elvi division, which sells clothes for larger women, and its Lerose manufacturing business.

The company said yesterday that in the interests of maximising shareholder value it would allow Mr Bunce to pursue his offer "for a limited period of time".

However, neither Mr Bunce, nor his wife will take part in the appraisal of any offers for Elvi or Lerose, nor any offer for the company as a whole.

Country Casuals' finance director, Andrew Mills-Baker, said that although no offer from Mr Bunce had yet materialised he assumed one would be forthcoming.

He admitted that to have two approaches from past or current chief executives in two years was unusual. Mr Bunce was not in the office yesterday.

Commenting on a profits warning last November, Mr Bunce said: "We've got a core business (Country Casuals) that made profits of pounds 3.5m last year. The problems is we have a start-up business (Elvi) and a manufacturing division that are dragging that down at the moment."

Mr Bunce bought 75,000 shares at 68p following the warning.

Country Casuals is due to report its full-year results on Thursday, with pre-tax profits of just pounds 100,000 expected. Investors will be looking for some reassurance on the performance of the company, which has issued two profits warnings in the last four months.

The Elvi stores and the Lerose business are expected to have lost pounds 1.6m and pounds 1.1m respectively.

Country Casuals was founded in 1973. Following the 1989 buyout, John Shannon together with Mr and Mrs Bunce, took the company on to the stock market in 1992, when its shares were priced at 130p per share. They reached 180p in January 1993 but have been below the issue price since last autumn.

John Shannon's hostile bid was a bitter affair led through his vehicle Ciro Holdings. He had resigned in September 1994 after a dispute over his contract.