Institutions concerned at GUS dispute

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The Independent Online
SOME of Great Universal Stores' institutional investors have expressed concern about the company's pursuit of the former directors of Argos, over statements made by the catalogue retailer during GUS's pounds 1.9bn bid.

They are "bemused" by the persistence of Lord Wolfson, GUS's chairman, in pursuing the issue, which they regard as unlikely to succeed.

GUS, which is expected to report a half-year profit of pounds 170m to pounds 190m on Thursday, has made a renewed approach to the Takeover Panel claiming it is unhappy with statements made during the bid battle. It is particularly concerned about claims made about the trading performance of the Argos operations in the Netherlands, which have since been closed. The company has also threatened legal action against the former Argos team.

GUS complained to the panel shortly after it won control of Argos. The panel said it felt there was no case to answer and GUS's right of appeal lapsed one month later. However, GUS has exercised its right to seek a meeting with the full panel to discuss the issue again. It sent a fresh set of documents to the panel on Tuesday, although these are thought to contain little new information.

GUS could seek a judicial review of the panel's decision. There are five precedents for this, though all have failed.

GUS is not claiming that it has suffered damage as a result of the Argos directors' claims. But it feels there is a principle at stake that directors should be bound by the Takeover Code and that the code should be monitored efficiently.

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