OpCapita closes in on Comet with help from ex-Dixons boss
Tuesday 04 October 2011
John Clare, the former chief executive of Dixons Retail, is advising private equity firm OpCapita on its bid to acquire Comet, the ailing British electricals retailer.
The pan-European group Kesa Electricals has been in talks with OpCapita and Hilco, the retail restructuring company, for months over the potential sale of the 248-store UK chain. The emergence of Mr Clare's involvement in the negotiations is the latest twist.
Dixons Retail owns Currys and PC World, which are the main rivals to Comet in the UK. If OpCapita did eventually gain control of the retailer from Kesa, then Mr Clare – who spent 22 years at Dixons Retail (formerly called DSGi) – may take an advisory role on a new board at Comet.
It is thought that Kesa, which owns the Darty electricals chain on the Continent, is now edging towards striking a deal with OpCapita over Comet. But Hilco could yet win the day and Kesa may decide to hang on to Comet, although Knight Vinke – the group's biggest shareholder with a 18.2 per cent stake – wants it to sell.
The electricals group had been expected to provide clarity on the position of Comet on 15 September, alongside a dreadful set of first-quarter sales in the UK. But Kesa merely said that its "Comet turnaround plan is under way" and that the firm is "continuing to examine strategic alternatives".
Negotiations between Kesa and the two suitors have been fraught with complications. This is largely because Comet has a pension deficit of £49m, a working capital requirement of about £50m and the City forecasts that its losses could double to £20m in the financial year to April.
However, in a recent development that could make a sale more likely, Kesa now appears willing to retain the Comet pension fund. Following talks with the pension regulator, Kesa could keep the scheme and pay into it over the next 10 years, even if it sells Comet.
Previously, it had been estimated that Kesa would have to invest more than £150m in total in Comet's future to convince the suitors to take it off its hands. The depth of Comet's problems was laid bare when it posted a 22.1 per cent plunge in like-for-like sales for the quarter to 31 July.
Comet was battered by consumers balking at big-ticket purchases of washing machines and fridges. It was also hit by weak sales of televisions compared to the boost it received during the football World Cup in 2010.
On a brighter note, Comet improved its gross margin by 80 basis points, driven by increased sales of higher-margin products, such as tablet computers. Its rivals are also struggling; Dixons Retail suffered a 10 per cent fall in UK sales for the 12 weeks to 23 July.
All parties declined to comment.
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
- 1 Scottish independence: Learn from Quebec's mistakes and beware of promises. Vote Yes.
- 2 iOS 8 is full of shiny new features - but it's terrible news for app developers
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
- 5 Cocaine and cannabis haul hidden in Vatican car seized by French police
Scottish independence referendum live - The reunited kingdom: Scotland gives a clear 'No' to independence in historic referendum
Archbishop of Canterbury admits doubts about existence of God
Scottish independence: YouGov final prediction puts No campaign 8 points ahead - but Yes team remains optimistic
Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...
Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...