3i triples its money in Interflora sale

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The Independent Online

Interflora, the bouquet delivery network that sold out last year to a private-equity group, was sold to a US competitor yesterday in a £65.7m deal that implied the value of the florists' umbrella group had tripled in a little more than 12 months.

Coming so soon after 3i paid £21.3m for control of the then member-owned organisation, the sale to FTD in the US enraged florists who had campaigned against selling out in the first place. At the time, dissidents argued 3i would be more likely to look for a quick sale than invest in Interflora's long-term health. David Adair, the most outspoken florist, said yesterday: "The whole thing is one big scam and it's the members who have lost out."

The sale to FTD, the co-owner of Interflora's Mercury man logo, handed a windfall to the group's management, which paid only a nominal sum for its 16 per cent stake in the business. Steve Richards, the chief executive who was brought in to handle the original disposal to 3i, declined to comment yesterday.

An Interflora spokesman said those florists who reinvested the proceeds of last year's windfall would have tripled their money. But Mr Adair disputed this, claiming: "When people reinvested they got mainly loan notes, not equity. Florists are stunned by the sale so soon."

Under the terms of Interflora's incorporation, safeguards were inserted to stop 3i from selling on the business during the first 12 months of ownership. Florists have the right to match FTD's offer if they want to stop Interflora from falling into the hands of its US rival but none of its members harbour any hopes of them managing to raise the sum required. The company said the Florists Advisory Committee, which is staffed mainly by former board members keen on the original sale to 3i, was evaluating its position.

"Florists are struggling so badly there is no way they could find the money or the will to buy it back," Mr Adair said. It is understood that as many as 300 of the original 1,850-strong membership have left Interflora since 3i took control because they were unhappy about the new owners. This is despite backing from 87 per cent of Interflora's members for the original sale.

Alan Stevenson, a 3i director, said the private equity group was selling on Interflora so quickly because it had "achieved in 17 months what it originally hoped to achieve in three years". Changes made to Interflora since it was bought by 3i include strengthening its network, creating websites for its members and improving group buying at a local level, the company said.