Selfridges agrees £598m Weston bid

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The bid battle for Selfridges moved to its final stages yesterday when the upmarket department store group agreed a £598m cash offer from Canadian billionaire Galen Weston.

The bid battle for Selfridges moved to its final stages yesterday when the upmarket department store group agreed a £598m cash offer from Canadian billionaire Galen Weston.

However, the possibility of a counter-offer remains with Iranian investor Robert Tchenguiz issuing a statement to say he had formed a consortium of investors under the name Aletheia Partners, to look at whether a higher offer could be made. The bid group includes Formula One entrepreneur Bernie Ecclestone and a number of other high-profile business figures. They could bid more than 400p a share and a further statement is expected later this week.

Mr Weston moved to block rival bidders by buying up 10.1 per cent of Selfridges stock, meaning an interloper would not be able to take full control of the company. An additional hurdle is a £5.9m break-fee, which is payable to Mr Weston's bid camp in the event of a counter offer being recommended.

Tom Hunter, the Scottish entrepreneur, announced he was pulling out despite frenzied last-minute negotiations which saw him team with the Reuben brothers, the Asian metals traders who had earlier been working on their own, separate bid. "We gave it a real good shot," Mr Hunter said. "They've won the business, good luck to them."

Richard Ratner at Seymour Pierce, said: "Other bidders are going to find it difficult unless they can tempt Weston to sell. It looks like a pretty full price."

But Paul Smiddy at Robert W Baird Securities, disagreed: "I don't think it's over yet."

Mr Weston's offer is being made through Oxford Acquisitions, a subsidiary of Wittington Investments Canada. It values Selfridges at 387p a share, with a 5.25p dividend payable on top. It will also assume Selfridges's £30m of debt. Selfridges shares closed 44.5p higher at 400p, a premium to the bid price, indicating the possibility of a higher bid.

The bid from Galen Weston would bring Selfridges into the ownership of one of the world's richest families. Wittington Investments Canada owns the Brown Thomas department store group in Ireland and Holt Renfrew, a chain of upmarket department stores in Canada. Wittington Investments Canada is run separately from the UK arm, which owns Fortnum & Mason, Heal's and a 54 per cent stake in Associated British Foods, the food maker whose brands include Kingsmill bread and Twinings tea.

Mr Weston plans to retain the existing Selfridges management team led by Peter Williams, who only took over as chief executive in March, and launched his own failed bid for the company.

Asked to comment on the appeal of Selfridges, Tony Graham, the president of Wittington Investments Canada, said: "It is an industry we know well, it is a business we know well and a management team we know well. It's something we've been watching for a long time."

BARGAIN HUNT HIGH STREET TARGETS

The retail entrepreneur Philip Green became king of the high street when he added the Top Shop-to-Miss Selfridges group to his Bhs chain in September last year. Mr Green, who is mulling a bid for Safeway, paid £850m for the company formed from the ashes of the Burton Group in 1998.

Galen Weston, the Canadian billionaire, yesterday appeared to clinch victory from rival suitors after Selfridges backed his £598m offer. But with Robert Tchenguiz, the Iranian investor, still lurking in the background, the upmarket department store could wind up with a different owner.

Dickson Poon scooped control of the fashionistas' favourite department store in December last year after an acrimonious bid process sparked accusations that the Hong Kong entrepreneur, who already had a 50.1 per cent stake, had bought it on the cheap. He paid £138m for the remaining shareholding.

In October 2001, the Weston family, of Wagon Wheel fame, paid £58m for the 10 per cent it did not own of the Piccadilly-based store that supplies tea to the Queen. Run by Jana Khayat, granddaughter of Garfield Weston, the department store is part of the family's private company.

Minerva led the £162m acquisition of Allders in February after teaming up with Terry Green, a former executive at Bhs and Debenhams. The property group was lured by the chain's trophy store in Croydon, where it is developing a shopping complex. The prospect of a bid battle with Tom Hunter never developed.

Britain's sixth biggest supermarket chain joined the bid frenzy in the sector last month after John Lovering and Bob Mackenzie, a former head of National Car Parks, offered £510m for the business. Their offer was rejected but they are mulling a revised bid worth £544m to £594m.

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