Although Galerias Preciados fetched much less than the pounds 200m-plus value suggested for it in recent months, at least some of Mountleigh's secured creditors seemed reasonably pleased with the deal. It is thought Galerias faced some form of credit crunch.
Tim Hayward, Peat Marwick's senior insolvency partner, said pounds 125m seemed to be a fair price and he was not disappointed. Peat Marwick contacted more than 100 potential buyers including all the larger retailers, he said. Nobody offered close to pounds 200m even before subjecting Galerias to a closer due diligence examination.
Galerias, Spain's second-largest department store chain, has been only modestly profitable in recent years and last year lost Ptas4.3bn. 'It's not an opportunity to pick up a blue chip, majorly profitable operation,' Mr Hayward said. 'Prime international retailing groups were not minded to express an interest in it.'
Galerias has been sold to three Spanish businessmen, including Justo Lopez-Tello Camara, who is a former director of the company, having worked for it for many years under a previous owner. Mr Lopez-Tello will own 36 per cent of Galerias and will become managing director.
Mr Hayward said he hoped to make the first distribution to Mountleigh's secured creditors in the next month or two. Sources close to the negotiations believe secured creditors will eventually receive 75-80 per cent of what they are owed. Unsecured creditors are unlikely to receive anything, as Peat Marwick indicated in August.
The bulk of the money paid for Galerias is to repay debt, with only a nominal amount being received for its shares. Mr Hayward was unwilling to give details, though some of the consideration will not be received for some months.
Mr Lopez-Tello's partners are Fernando Sada Gonzalez-Breto, who will have a 36 per cent stake and will be president of Galerias, and Santiago de Mollinedo Martinez, who will own 12 per cent.
At a press conference in Spain, the new owners would give few details of their plans for the business.
Mountleigh still owns 83 properties in the UK, the most important of which are the shopping centres at Merry Hill in Dudley, in the West Midlands, and in Camberley, Surrey. Mr Hayward said the receiver did not feel under urgent pressure to sell.Reuse content