One of the two private equity groups battling it out for the department store group Debenhams last night raised its offer to £1.7bn in what it hopes will be a knockout bid for the company.
Baroness Retail, a consortium of CVC Partners and Texas Pacific which already has the highest bid on the table, raised its offer from 455p a share to 470p.
The surprise move was designed to take advantage of uncertainty in the rival Laragrove consortium led by Permira and give Baroness a decisive advantage among Debenhams shareholders.
The increased offer comes only a week before the deadline set by the Takeover Panel of 31 October for final bids for Debenhams. The bid was pitched at 3.25p above Debenhams' closing share price last night of 466.75p.
The market had been expecting an increased offer, but not from Baroness, which has effectively bid against itself. It said its latest offer had been recommended by Debenhams' independent directors and was a "compelling" one for shareholders.
Laragrove kicked off the bid battle in July with an offer valuing Debenhams at 425p. Baroness trumped that last month. Since then the US investment bank Goldman Sachs has pulled out of the Laragrove consortium, reportedly because it felt the price was getting too high.
Should the Baroness bid succeed then it would almost certainly mean the departure of Debenhams chief executive Belinda Earl. The Baroness consortium is led by John Lovering, the retail entrepreneur behind Homebase and also features two other senior retail figures, Rob Templeman, formerly of Homebase and Chris Woodhouse of Halfords.
Ms Earl admitted last week that should the Laragrove offer fail, then her future with the company would be uncertain. The Laragrove team has no retail expertise of its own.
Debenhams, demerged from Burton Group in 1998, has 102 stores in the UK and Ireland.Reuse content