Bidders seek to bag Peacock and Jenners

Click to follow
The Independent Online

The Peacock Group, which owns the struggling bonmarché chain, admitted yesterday it had become the latest retailer to receive a bid approach.

The Peacock Group, which owns the struggling bonmarché chain, admitted yesterday it had become the latest retailer to receive a bid approach.

Analysts speculated that any bidder - likely to be from the private-equity arena - could pay between 300p and 350p a share to acquire the group, valuing it at £355m to £410m. Shares in Peacock, which issued a profits warning in January after a poor Christmas, surged 41p to 289p.

The company said it had received an "indicative approach" but was at pains to emphasise that talks between the two parties had barely kicked off.

"The board would wish to stress that the indicative approach is at a very preliminary stage," it said. Any offer would also be subject to a number of "material preconditions", it warned.

The main condition from a private-equity bidder is likely to be a recommendation from the board and a pledge that Richard Kirk, the chief executive, would stay on to run the business, analysts said.

Sanjay Vidyarthi, an analyst at Teather & Greenwood, said Peacock was a "more compelling" bid target than Woolworths, the pick 'n' mix retailer that is being stalked by Apax.

"Peacock's share price has been languishing. It was on a low multiple, but it is a business that can be fixed in a relatively short period. It's probably a good opportunistic move at these price levels," Mr Vidyarthi said.

Although the retailer's core chain, Peacocks, is a constant winner on the high street, its bonmarché division, which is aimed at women over 55, has performed dismally since the summer.

Underlying sales at the 353-strong chain fell 8.5 per cent over Christmas, just weeks after the group had reassured the market its problems were on the mend, and prompted the group to slash its internal profit expectations by £4m.

Seymour Pierce is predicting the group, which owns The Fragrance Shop chain of perfumeries, will make pre-tax profits of £38m. The group does not have a pension deficit.

Comments