KKR sizes up Littlewoods bid

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The Independent Online
NIGEL COPE

The UK arm of Kohlberg Kravis Roberts, the American leveraged buy-out specialist, has confirmed an interest in bidding for Littlewoods, the retail and football pools empire. The interest could spark a bid battle for the Liverpool-based group, which is already the subject of a pounds 1.2bn indicative offer from its former chief executive, Barry Dale.

Though no formal representation has been made to the Liverpool-based company, the KKR team is said to be "watching the situation closely". KKR is thought to have management candidates in mind to run Littlewoods if it makes a formal offer. However it has denied it is backing Tony Fitzsimons, the former chief executive of the Bristol & West Building Society.

Littlewoods said last night it had received no contact from KKR though it added that further bid interest would come as no surprise. KKR's UK division, called Glenisla, is led by Ian Martin, the former chief executive of Burger King, who joined as UK chief executive earlier this year.

The group was involved in early discussions with Mr Dale, but decided not to take its involvement further at that time. Mr Dale is now being advised by merchant bank Dawnay Day and has financial backing from blue- chip venture capital groups.

Any KKR offer would pose a serious threat to Mr Dale's consortium. Mr Dale was ousted from the group last year and is unlikely to be popular with some factions of the Moores family, which controls all the Littlewoods shares.

Mr Dale's consortium recognises the risk of its bid being used as a stalking horse for another group that may ultimately be more successful. However it is sceptical KKR is genuinely interested in taking its interest much further.

The Dale consortium is expecting to strengthen its management team with a high-profile chairman who would be widely respected by the Moores family. The group has made approaches to one or two "captains of industry" who have expressed an interest. If the bid was successful, Mr Dale would be chief executive and John Coleman , the former chief executive of Texas Homecare, would be managing director of the retail division.

So far only Mr Dale's consortium has made an indicative offer. Littlewoods has called an emergency general meeting next month, when the 32 members of the Moores family who own all the shares in the company will decide whether or not to take the bid further and allow the Dale consortium access to the Littlewoods books.

Littlewoods' retail and pools businesses has been struggling. Last year it reported flat profit of pounds 116m on sales of pounds 2.7bn.

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