Ratner's 'ludicrous' bid for jewellery chains is rejected

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Gerald Ratner's hopes of acquiring H Samuel and Ernest Jones, Signet's UK jewellery chains, were dealt a blow yesterday after the group's chief executive insisted they were "not up for sale".

Terry Burman, who was speaking as the group unveiled a rise in interim pre-tax profits, said the UK business was a "core part" of Signet, the world's biggest jewellery retailer, which makes the bulk of its money in the US.

"The UK division provides a geographic balance that helps in periods like 2001 when the US was struggling," Mr Burman said.

Mr Ratner, who ran Signet in its previous guise before being forced out in the early 1990s for calling one of its products "total crap", has said he is working on a bid for H Samuel, Ernest Jones and Leslie Davis. He is "very confident" of securing funding and intends to pounce well before the group's key Christmas trading period, he has said.

Mr Ratner expressed his interest in the jeweller's UK chains after it emerged that other companies had run their slide rules over Signet. Zales, its main US rival, and KKR and Apax Partners have both approached Signet about making a possible takeover offer in the past few months, although they have since abandoned their plans.

Reports have suggested that Mr Ratner is prepared to bid £150m-£200m for Signet's UK chains - a sum Mr Burman dismissed as a "ludicrous price". He said: "Businesses don't get sold for three or four times their ebit [earnings before interest and taxation]. The absurdity of that doesn't bear serious consideration."

The operating loss at Signet's UK arm widened in the six months to 29 July to £3.4m from £2.4m. During the period, like-for-like sales were flat, dragged down by a 1.6 per cent fall in sales at H Samuel. Last year, the UK chains made a full-year profit of £50m.