GUS returns to attack on Argos

GREAT UNIVERSAL Stores renewed its attack on the former Argos directors yesterday claiming they should be "shown the yellow card" for what it claims were inaccurate statements made during the company's pounds 1.9bn bid for Argos.

Failure to do so, Lord Wolfson, GUS's chairman, said, would risk making a "car boot sale out of takeover bids".

Lord Wolfson said he would consider taking his case to the Department of Trade and Industry, the High Court and the House of Lords if his second approach to the takeover panel is turned down.

"Showing the yellow card would mean a public rebuke saying 'don't do it again'. If [the panel] don't do that it means economy with the truth is acceptable. We don't think that is a good regulatory regime," he said.

GUS's claims centre on statements made by Argos about its fledgling operations in Holland. Argos said initial sales were "ahead of expectations".

GUS claims that having obtained the management accounts it is clear that sales were substantially below forecasts and that Argos failed to reveal this to the market. Under panel rules "any material change in any information" should be released.

However, it is understood that cumulative sales at Argos in Holland were ahead of expectations throughout the duration of the bid, although they may have dipped below budget on particular weeks.

The former Argos directors deny any breach. The panel has also said it is satisfied the code was adhered to. It has written to GUS saying it will consider its renewed claim. However, it is understood that the panel has not seen anything in GUS's new claims to make it change its mind.

The comments came as GUS reported a sharp fall in first-half profits from pounds 261m to pounds 176.1m. This was in line with an earlier warning on profits which said that trading profit from the Argos and Metromail database acquisitions would be weighted towards the second half.

Argos sales in October and November were 4 per cent below the same period last year. The grim news forced GUS shares 25p lower to 549p, their lowest point since 1995.