Ahmed tailors new bid for Moss Bros

Retail entrepreneur Shami Ahmed is ready to make a fresh bid for Moss Bros, the struggling men's clothing retailer.

Moss Bros directors rejected Mr Ahmed's 40p per share bid for the company a week ago. The approach values it at around £36m. Moss Bros, which contains the Cecil Gee chain, was set up in 1851, but has recently plunged into losses.

Mr Ahmed is now deciding whether to increase his original offer to try to get a recommendation, or launch a hostile bid. But it is understood he has ruled out walking away from Moss Bros.

The company refused to open its books for a due diligence review. In a statement, Moss Bross said this was "due to the inadequate price indication given and the apparent lack of committed funding for any proposed offer that might be forthcoming following a due diligence process."

The approach has already turned acrimonious as lawyers acting for Moss Bros complained to the Takeover Panel, the City regulator, over the tactics used by Mr Ahmed.

Shami Ahmed made his fortune by setting up the Joe Bloggs jeans company, and he is now believed to be worth around £75m. More recently, he set up Legendary Investments, an investment company quoted on AIM.

Mr Ahmed has been rumoured to be interested in bidding for Moss Bros since last May. He publicly declared his interest late last year. He has already amassed control of more than 5 per cent of the company. However, it was revealed last week that he only owns a small proportion of the shares, although he does hold their voting rights.

Insiders say that further action may take place next week, although Mr Ahmed would not comment on Moss Bros. He has said in previous statements that he has the necessary finance in place, that the offer is in cash, and that the 40p per share bid is at a 26 per cent premium to the share price before his offer was announced.

The Moss Bros board has said that the results for last year could be "materially worse" than the previous year's operating loss of £3.4m. It brought in a new chief executive, Adrian Wright, last week. Mr Ahmed has called the company's recent trading history "lamentable."

Mr Ahmed is advised by Nick Wells at WestLB, who was embroiled in the Blue Arrow fraud trial in the early 1990s but was acquitted of all charges.