Baird poised to go private with MBO

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The Independent Online

William Baird, the UK clothes maker which is suing Marks & Spencer, said it is close to making an announcement on a possible management buyout that would take the firm private.

William Baird, the UK clothes maker which is suing Marks & Spencer, said it is close to making an announcement on a possible management buyout that would take the firm private.

The company said on 17 May it had received informal offers to finance a purchase of the firm's shares and that it would establish a special committee to look at the option.

''We expect to make an announcement in weeks rather than months,'' said the chief executive, David Suddens, adding that due diligence had been performed as part of discussions with banks and venture capital firms to fund an MBO. He provided no further details. The shares fell 2.5p to 70p.

Baird also said it was restructuring its menswear business after announcing a 104 per cent rise in profit to £4.5m in the six months to 30 June. The company made a £2.2m profit in the same period last year, and a full-year loss of £79.5m, after M&S, the UK's biggest retailer, dumped it as a supplier. That resulted in the firm sacking 4,500 staff and closing 16 factories at a cost of £100m. The company said it had completed the withdrawal from its M&S business.

Sales of menswear were flat in the half with margins slashed by discounting. "The market has not become easier. We continue to outperform in womenswear but have suffered ... in menswear," said Mr Suddens.

On 29 June a High Court judge dismissed part of Baird's £54m action for breach of contract against M&S, which the company is now appealing. However, the case is proceeding to a full trial on the grounds of "estoppel", a part of the law designed to stop firms behaving in a way which is inconsistent with their past actions and the expectations these have created. M&S's appeal of that decision is to be heard on 16 January.

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