CRS flirts with bid speculation

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The Independent Online
The head of the Co-operative Retail Society appeared to be encouraging takeover attempts yesterday when he said the group would put a serious bid to its members, writes Nigel Cope.

The comments also represent an implied criticism of the way Graham Melmoth, chief executive of the larger CWS, handled the pounds 1.2bn takeover approach from Andrew Regan. Mr Melmoth, who saw off Mr Regan's bid last week, refused to put the matter to members, saying the group's board had taken the decision unanimously to reject the bid.

"I don't see what the problem is," Mr Moore said. "If the shareholders want to change the structure from mutual to a joint stock company they should have the option. If we were in that position we would put it to our members but I am confident that they would vote to stay as they are."

Although the CRS did not receive a bid approach from Mr Regan, Mr Moore met the 31- year-old entrepreneur in February. At the meeting Mr Regan tried to persuade Mr Moore to withdraw his support for the CWS and Mr Melmoth but he declined.

The CRS would make an easier takeover target than the larger CWS because it has a simpler ownership structure. Unlike the CWS, which is owned by the regional societies, the CRS is owned by its 1.5 million individual members who each have a single vote. The CRS said it had seen membership applications soar from 500 a week to more than 2,500 a week since the Regan bid as carpetbaggers moved in.

Mr Moore's comments came as the CRS reported a collapse into loss for the first time in years due to poor trading and heavy exceptional charges. Though the figures followed poor results from the CWS earlier this month, Mr Moore said he was opposed to a merger of the two bodies.

He said: "One single Co-op in the UK is theoretically the answer but I see no evidence that it is achievable. Getting our structure right is not the problem. What we need to do is get our trading performance right."

The CRS, which is restyling itself as Co-operative, reported a pounds 13.85m loss compared to the previous year's pounds 13.7m profit. The losses were exacerbated by exceptional costs of pounds 18m relating to the repositioning of the group, a new trading format and a store refurbishment programme. Of these pounds 6.7m related to the cost of a new corporate identity. The CRS also moved into a pounds 30m new head office. Group sales were 0.9 per cent lower at pounds 1.54bn.

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