Littlewoods backs out of Freemans deal

Littlewoods yesterday unexpectedly backed out of its pounds 395m deal to buy the Freemans home shopping business from Sears after learning that the Selfridges to British Shoe group had received approaches from other bidders.

The leading candidate is N Brown, the Manchester mail order company controlled by Sir David Alliance, who has made no secret of his interest in acquiring Freemans. Though other possible buyers could include Pinault Printemp-La Redoute, which owns the Empire stores operation in the UK, and Otto Versand, the German group which owns Grattan, N Brown is considered by analysts as being the most serious bidder.

Littlewoods withdrew from the fray after it was told that Sears was in active negotiations with other parties. Littlewoods had insisted on exclusive negotiation rights and was thought to be angered by Sears' actions.

Sears said it had received approaches from "a number of parties". Though N Brown, is the frontrunner it is understood that Lanica Trust, the tiny investment vehicle controlled by 31-year-old Andrew Regan had been interested, though it is not clear if he has made a formal approach.

There is speculation that any delay in the deal could spell the end for Sears' chief executive, Liam Strong, who has been under pressure from institutions frustrated at the group's lacklustre performance.

He has been keen to sell Freemans quickly in order to fulfil his promise of returning pounds 410m to shareholders. The Littlewoods deal hit a snag when it was unexpectedly referred to the Monopolies and Mergers Commission last month.

Mr Strong emphasised the need for speed yesterday: "It remains the board's intention to achieve the price expected for Freemans and to return the cash to ordinary shareholders. We are committed to achieving this in the shortest possible timeframe."

Though Sears shares fell 0.5p to 81.5p on the news, analysts said the development should be viewed positively. "Initially it seems to suggest that Sears can't close deals. But really it is that Sears has committed itself to returning pounds 410m to shareholders and is looking at the best way to achieve that."

Littlewoods said it was disappointed with the outcome but said it was still interested in buying Freemans if Sears' other options collapsed. "We still want to do this deal with them but felt that if they did not want to negotiate with us exclusively then there was no reason to pursue it."

Littlewoods has informed the MMC that its discussions with Sears have been terminated. However, it is still possible that the MMC will continue its investigation. It can ask the DTI to lay aside a merger inquiry if it is satisfied that the merger has been terminated. With no formal confirmation yet received from Littlewoods, the MMC said that "at the moment we still have an on-going inquiry".

Littlewoods said the collapse of its deal had no implications for the proposed sale it announced earlier this week of its high street stores, which it is hoping will fetch up to pounds 600m. However, analysts said the position was now "more interesting" and questioned whether Littlewoods would be able to find a buyer for the whole chain at the price it is seeking.

The capture of Freemans would mark a coup for N Brown, which occupies a small niche in direct mail order catalogues aimed principally at older customers. But though it is relatively small, it is regarded as one of the most efficient mail order groups in the country with state-of-the- art database management skills and distribution systems.

The company mounted a pounds 1bn-plus bid for the Littlewoods empire in 1995 in conjunction with Iceland. Though rejected by the group's family shareholders, that deal would have seen N Brown take the home shopping division, with Iceland retaining the high street stores while the Littlewoods pools business would have been sold.

N Brown has a market share of slightly more than 4 per cent, and it is unlikely that its purchase of Freemans, which has 8 per cent, would attract the attention of the competition authorities.

Arts and Entertainment
books
Voices
Caustic she may be, but Joan Rivers is a feminist hero, whether she likes it or not
voicesShe's an inspiration, whether she likes it or not, says Ellen E Jones
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
PROMOTED VIDEO
Life and Style
3D printed bump keys can access almost any lock
techSoftware needs photo of lock and not much more
Arts and Entertainment
The 'three chords and the truth gal' performing at the Cornbury Music Festival, Oxford, earlier this summer
music... so how did she become country music's hottest new star?
Life and Style
The spy mistress-general: A lecturer in nutritional therapy in her modern life, Heather Rosa favours a Byzantine look topped off with a squid and a schooner
fashionEurope's biggest steampunk convention heads to Lincoln
News
Dr Alice Roberts in front of a
peopleAlice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
News
i100
Arts and Entertainment
Star turns: Montacute House
tv
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Arts and Entertainment
Unsettling perspective: Iraq gave Turner a subject and a voice (stock photo)
booksBrian Turner's new book goes back to the bloody battles he fought in Iraq
News
The Digicub app, for young fans
advertisingNSPCC 'extremely concerned'
News
i100
Arts and Entertainment
Some of the key words and phrases to remember
booksA user's guide to weasel words
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

Day In a Page

The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

Kacey Musgraves: Nashville's hottest new star

The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

Soldier-poet Brian Turner on his new memoir

James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

Villa were not surprised that Vlaar was a World Cup star

Andi Weimann reveals just how good his Dutch teammate really is
Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

Bill Granger's simple Italian salads

Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
The Last Word: Tumbleweed through deserted stands and suites at Wembley

The Last Word: Tumbleweed through deserted stands and suites at Wembley

If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution