Baugur puts its £40m offer for Moss Bros back on the shelf

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The Independent Online

A member of the Moss Bros menswear dynasty called yesterday for an end to "factional fighting" among the company's board after the Icelandic investment group Baugur withdrew its indicative £40m offer to buy the high-street retailer.

David Moss, a former director of the company, said it was time to "rebuild relationships on the board". He added: "What we must now have is a period of collaborative working together and rebuilding shareholder value. There can be no room for factional fighting between shareholders."

Members of the Moss and Gee family, who between them control about 23 per cent of Moss Bros, have been outspoken opponents of Baugur's potential bid since the Icelandic investor said it was considering a possible offer in December. Moss Bros non-executive director and Baugur board member Don McCarthy has criticised the family's stance publicly.

Yesterday, Baugur, which owns retailers including Karen Millen, Oasis and Hamleys, said the risk was too high that a deal might not go through, given recent changes to the Moss Bros shareholder register. It is understood Baugur believed it was unlikely it would get the backing of 75 per cent of the menswear retailer's shareholders for its 42p-a-share indicative offer.

Baugur Group chief executive, Gunnar Sigurdsson, said: "We are disappointed by recent developments that have effectively frustrated our proposed offer, but remain supportive of the management team. Baugur is keen to continue to work with the board, management and other major shareholders to identify ways to unlock the potential in the business."

It is unclear to which shareholder group Baugur was referring, but this year the home furnishings retailer Laura Ashley has gradually built a near-10 per cent stake in Moss Bros.

Some members of the Moss and Gee family have recently sold shares to reduce both families' combined stake to about 23 per cent. In March, the French bank Crédit Agricole Cheuvreux reportedly purchased a near-8 per cent stake

Laura Ashley and Crédit Agricole Cheuvreux are thought to have bought their stakes at above Baugur's offer price, which made it unlikely they would be prepared to sell their shares for 42p each.

Yesterday, Moss Bros's shares fell by 5.25p to 40.25p.

As a potential contingency plan, it is understood Moss Bros has stepped up a search within the past three weeks for a replacement for chairman, Keith Hamill, who said last November he would step down in April. A source close to the company said three candidates are being considered and a new Moss Bros chairman could be unveiled next month. It is not clear when Mr Hamill, who vowed to remain while the potential bid process was ongoing, will leave.

The decision by Baugur to shelve its indicative offer means it cannot make an offer for Moss Bros for six months unless there is a substantial change in circumstances, such as a third party making a separate bid.

Moss Bros posted a pre-tax loss of £1.4m in the year to January 26.