Littlewoods draws up shortlist for stores bids

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The Independent Online
Littlewoods has identified a shortlist of around 10 potential bidders for its high street stores which were put up for sale earlier this month.

The shortlist is thought to include supermarket groups, high street retailers and property companies as well as venture capital groups.

BZW, handling the sale on Littlewoods' behalf, is expected to narrow the field down to four or five firm bidders in the next few weeks. They will then be offered more detailed information on the business. The initial sales memoranda were only sent out last week.

Though chief executive James Ross is keen to sell the 135 stores in one block, City analysts doubt that any bidder will be interested in all the stores at the rumoured price tag of around pounds 600m. However, it is understood that various consortia are forming in which a lead bidder would buy the whole chain and then sell off or close the stores it does not want.

BZW is confident that the opportunity to buy the best stores combined with the threat of a rival taking them will be sufficient to secure a good price.

Retailers tipped to be interested in Littlewoods include Kingfisher, Tesco, Asda, Next and C&A. However, Tesco now has its hands full with last week's pounds 630m purchase of 109 supermarkets in Ireland.

Barry Dale, the former Littlewoods chief executive who made a pounds 1.1bn bid for the group in 1995, says he is not interested in making an approach at the current price. His bid last year valued the stores at pounds 450m.

Kingfisher, the Superdrug and Comet retailer, has received a sales memorandum. It is interested in some stores to convert to its Woolworths format. But Kingfisher would not be interested in the whole high street chain as many of its formats such as B&Q and Comet are out of town and the Superdrug stores would be too small for the Littlewoods space.

BZW believes that the under-exploited nature of the Littlewoods portfolio make it a valuable asset. It says that only half of the 7 million square feet of space is configured as retail space. The rest is devoted to warehousing or other non-profit making activities.

Few believe any bidder would be interested in continuing to trade the stores under the Littlewoods name. The stores, which have been under-invested for some time, made operating profits of just pounds 33.3m on sales of pounds 479m last year.