Lloyds Bank unit joins race to acquire Blacks Leisure

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The Independent Online

The private-equity arm of Lloyds Banking Group has held talks with Blacks Leisure over a potential acquisition of the outdoor specialist retailer.

LDC (Lloyds TSB Development Capital) is the latest company to join the bidding process for Blacks that is believed to be progressing at pace.

Lion Capital, the private-equity firm that owns the parent of the Cotswold Outdoor chain, as well as Go Outdoors, Black's 27-store-strong rival, are also believed to have thrown their hats into the ring. Blacks, which was saved from collapse by an insolvency procedure last year, said it had received initial takeover offers from "several parties" last month. The interest of LDC in Blacks is not entirely unexpected, as it acquired a stake of about 23 per cent in Mountain Warehouse from the Icelandic fund Kcaj in September. The share deal valued Mountain Warehouse, which has 110 stores, at £50m.

One of the options that LDC is considering may be to combine Mountain Warehouse with Blacks and Millets to deliver economies of scale. But the thoughts of Mark Neale, the founder and majority shareholder in Mountain Warehouse, on such a strategy are unclear.

Blacks Leisure, Go Outdoors and Lion Capital declined to comment, while LDC did not return calls.

Lion Capital made an initial offer for Blacks in early 2009, but a full bid never materialised. Go Outdoors hired the serial deal maker John Lovering, the former chairman of Debenhams, as its chairman in August, which set tongues wagging in the City about its ambitions.

For the 26 weeks to 28 August, Blacks Leisure reduced its losses to £8.5m from £15.2m last year, after it ditched 88 unprofitable stores in late 2009.