Peter Black in £223m management buyout

The board of Peter Black Holdings, the Marks & Spencer footwear and toiletries supplier, yesterday agreed a management buyout of the company, valuing the business at £223m.

The board of Peter Black Holdings, the Marks & Spencer footwear and toiletries supplier, yesterday agreed a management buyout of the company, valuing the business at £223m.

The offer, led by the chairman, Gordon Black, has been pitched at 350p per share compared with the 380p price indicated in July when the company first indicated the management's approach. The directors said the reduced price was due to continued adverse publicity surrounding M&S as well as uncertain market conditions that had "restricted management's ability to fund an offer" at the higher level. Peter Black shares jumped 33p to 343p.

The announcement was accompanied by a downbeat trading statement that said orders from major customers, including M&S, have so far been "relatively slow". M&S accounts for 40 per cent of the group's output.

Peter Black's decision to go private makes it the latest in a series of traditional, Old Economy businesses to turn its back on the stock market. The five directors leading the buyout said they believed that the company had been undervalued for some time. They blamed negative sentiment towards mini-conglomerates, Old Economy stocks and smaller companies.

The offer price is 29.4 per cent above the closing price on 26 June when Peter Black shares started to respond to rumours of a possible bid. At 350p, the offer represents an exit multiple of 12.8 times. Jeremy Hilditch, an analyst at Williams de Broe said the offer was not overly generous but that it was the best institutions were likely to get. "I can't see any other bidder being interested," he said.

Peter Black, founded in 1947 by the current chairman's father, is based in West Yorkshire. Its operations include supplying own label healthcare products to the major supermarkets. The Black family control 20 per cent of the shares. The company recorded profits of £25.9m last year.

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