Austin Reed shares jump on takeover approach

A bid battle for Austin Reed is set to break out after the clothing retailer revealed that it had received a takeover approach.

The company did not name the suitor. Many pointed to retail entrepreneurs Richard Thompson or Harold Tillman. Mr Thompson recently bought the Jaeger business from Coats and immediately sold it on to Mr Tillman.

Mr Tillman said he was not behind the approach but confirmed that Austin Reed would be of interest. Through his BMB Group, he already owns a number of clothing brands, including British Taylor and Centaur.

"It [Austin Reed] has not escaped my attention. Our businesses would have huge synergies," Mr Tillman said. He added that any move on Austin Reed would probably be in conjunction with Mr Thompson.

Austin Reed said: "The board ... confirms that it has received an approach which may or may not lead to an offer.... The board is considering this approach and will make a further announcement in due course."

As well as the Austin Reed chain, which is largely formal clothing, the company also owns the Country Casuals format. The group is due to report a trading update next week, which, it is rumoured, will show a fall-off in business in recent weeks. Austin Reed shares rose 7 per cent to 137p. Other possible bidders were said to include Bricks, which owns the "Suits You" chain. It is thought that, if there had been a management approach, Austin Reed would have said so.

Rhys Williams, an analyst at Seymour Pierce, said: "It could be the foreign hordes coming back for another attempt. They were supposed to have received an approach from an Italian or German business about three years ago."

Mr Williams said that a successful takeover would need an offer of 180p or 190p a share or some £60m but, if trading did turn out to be poor, a bid could be pitched at 150p to 160p a share.