Kingfisher break-up value put at £4bn

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The Independent Online
Advisers to Kingfisher have put the break-up value of the troubled retail group at 550p-650p compared with a closing price of 408p on Friday, when the company announced a dramatic boardroom reshuffle.

Studies by Lazard Brothers and Goldman Sachs value Kingfisher at about £4bn. There has already been speculation that Kingfisher is ripe to be broken up and sold piecemeal.

The traumas at the group, which includes Woolworths, Comet, Superdrug and B&Q, have resulted in the departure of Alan Smith, chief executive, and James Kerr-Muir, finance director. Sir Geoff Mulcahy last week stood down as chairman, but returned to the role of chief executive with the task of turning the group's fortunes around.

A spokesman for Kingfisher said studies of the break-up value had been done but this did not mean such a move was on the cards. "Geoff Mulcahy is carrying out a thorough review of operational and financial aspects of the business and has always given a great deal of attention to shareholder value. Inevitably one aspect of that is a demerger study," he said.

He said there was also a view that retailers should look for groupings at a European level and that size and the clout that goes with it were important factors when seeking partners. "Any demerger study has to be seen in that context," he added.

The changes at Kingfisher were driven by the concerns of non-executive directors at the deteriorating performance of the group, which has become the worst performer in the FT-SE 100. Comet will make a loss this year and profits at Woolworth are expected to be down by a third. The group has also said that Woolworth's managing director, Jonathan Weeks, will take early retirement and be replaced by Roger Jones from Superdrug.

Some analysts ask if enough has been done and whether Mr Mulcahy should also leave. His position was defended last week by Sir Nigel Mobbs, the non-executive director now becoming chairman, who said Mr Mulcahy is viewed as the person to turn the group around.

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