The battle for control of Littlewoods, the football pools and retail empire, took a new turn yesterday when the company proposed a pounds 250m share buy-back. The proposal is designed to offer an exit route for members of the controlling Moores family and maintain the company's independence.
Littlewoods also warned that it expected this year's profits to be "some way below" last year's level of pounds 116m. It blamed the National Lottery for damaging its pools business, but also said trading conditions were difficult for its chain stores and that its home shopping division was suffering from weaker sales and higher bad debts.
The share buy-back proposal is seen as an attempt by the Littlewoods board to scupper the indicative pounds 1.2bn offer for the company by Barry Dale, the former chief executive.
The board's efforts were immediately criticised by the Dale camp, which said the proposals lacked substance and would push the company deep into debt. Mr Dale's consortium, which is being advised by Dawnay Day merchant bank, was working through last night on a response which should be issued today.
The Littlewoods proposals were contained in a circular sent by Leonard van Geest, chairman, to the 32 members of the Moores family who own all the shares in the Liverpool-based group. Dated 22 November, it states that the board is prepared to spend pounds 200m-pounds 250m on buying back shares from family members who may wish to sell.
It declined to name a price, saying this would only be decided after consultation with the family. However, it is likely to be significantly below the indicative 848p-a-share offer from Mr Dale.
It adds that more than pounds 250m could be spent but this may have a detrimental effect on the business, which is currently debt-free. "It would be more likely that the group would need to make disposals to help pay for any share purchases," it says.
Jim Michie, Littlewoods finance director, said: "If there are a few [shareholders] who want out, then why don't we set up another buy-back device.
"What we are saying is that, after 70 years in business, why rush? You have plenty of time to come to a rational conclusion."
Advising shareholders to reject the Dale offer, the Littlewoods board also urged Moores family members to wait for the outcome of two reviews of the business due for completion later this month. It added that it had received several other offers for parts of the business.