Liberty family attacks board decision to sell up after 125 years of retailing

The `for sale' sign was yesterday hoisted over Liberty, the upmarket retailer. The company's board took the decision to prevent Liberty's founding family and a rebel shareholder from trying to win control of the group without paying a premium price. Nigel Cope, City Correspondent, reports.

Liberty would be valued at pounds 84m at yesterday's closing share price, which soared 25p to 377.5p. Nick Bubb, retail analyst at Societe Generale Strauss Turnbull, said possible buyers of the Regent Street retailer could include House of Fraser, which owns the Dickens & Jones and DH Evans department stores, and Great Universal Stores, the mail-order group which owns Burberry and Scotch House. GUS has sufficient cash resources for a bid and has been rumoured to be interested in expanding its high street retailing interests.

Other buyers could include Allders, the department store group which has been looking for a central London flagship store, and Harvey Nichols, the Knightsbridge store group which has been expanding fast. Another possible buyer would be Harrods, the Knightsbridge department store group owned by Mohamed Al Fayed. Overseas buyers keen on snapping up a trophy London asset may also be interested.

The plan to seek buyers for the 125-year-old company was attacked by the Stewart-Liberty family which has aligned itself with Bryan Myerson, a rebel shareholder. The two groups, which between them account for 44 per cent of the shares, said they would press ahead with their plans to oust Denis Cassidy as chairman and appoint Mr Myerson and Odile Griffith, the family's financial adviser, as joint chairmen.

Liberty's managing director, Ian Thomson, said the board was seeking to act in the interests of all shareholders. It criticised the Stewart- Liberty family and Mr Myerson for attempting to gain control without paying a premium and without giving other shareholders the opportunity to exit. "We believe that it is improper in terms of corporate governance.

"The company is in much better shape than it was 18 months ago. There could be a number of companies that would be interested."

The board revealed yesterday that in June Mr Myerson had proposed that a shell company be established to take over Liberty. Mr Cassidy and the two other executive directors, Ian Thomson and Andrew Garety, would have been granted a 10 per cent stake between them. The board said the bid would have diluted the Stewart-Liberty shareholding.

The board rejected the proposal though Mr Myerson then made a second proposal in July. This would have involved separating the retailing and wholesaling operations of Liberty from the property, brand and licensing interests.

This revised plan would have included a share option scheme which Mr Myerson claimed could have yielded pounds 8.3m to the three executive directors over five years.

The board said this would also have diluted the family shareholding.

However, the family and Mr Myerson confirmed yesterday that they will stick to an irrevocable undertaking to act in concert for six months.

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