Selfridges wrestles with £600m dilemma

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The Independent Online

Alun Cathcart, the chairman of the Selfridges chain of department stores, was poised this morning to announce an agreed bid for his company worth nearly £600m. But he is uncomfortably aware that he may merely be approving an opening price in what could become a fierce takeover battle.

Alun Cathcart, the chairman of the Selfridges chain of department stores, was poised this morning to announce an agreed bid for his company worth nearly £600m. But he is uncomfortably aware that he may merely be approving an opening price in what could become a fierce takeover battle.

Last night the Selfridges board was debating the merits of the various alternative offers in a tense meeting held at the back of the group's main store in London's Oxford Street, aiming to come up with one preferred bidder which could be put to the London Stock Exchange. They have to face shareholders at their annual meeting on Thursday.

The company's share price has risen from 242p to 358p since the beginning of last month, valuing it at £549m. The London store alone is valued at £350m.

While Galen Weston, of the immensely wealthy Weston family from Canada, is the front-runner to win Selfridges, analysts believe he will be fortunate to walk away with the prize unopposed.

The Scottish entrepreneur Tom Hunter, who has been linked with Allders and House of Fraser, has tabled an offer believed to be worth £510m, and may be able to use a higher rival bid to persuade his backers to stump up more firepower.

The secretive billionaire Reuben brothers, who have made their money from metals trading have sent a letter expressing interest, and Selfridges' chief executive, Peter Williams, is said to have drawn up plans for a management buyout backed by Blackstone, the US owner of the Savoy hotels group. A consortium led by the US investment bank Goldman Sachs is also reported to be monitoring the situation, as is Robert Tchenguiz of the property group Rotch.

And, despite his denials, it would be rash to rule out Philip Green, the serial entrepreneur who has amassed a fortune from overhauling such retail names as Olympus Sport, Bhs and Arcadia.

The battle began when Selfridges announced it had received an approach on 9 April, believed to be from Mr Hunter. But the group's future was thrown into doubt in March when Mr Williams's predecessor, the flamboyant Vittorio Radice, decamped a five-minute walk from Selfridges up London's Baker Street to the head office of Marks & Spencer. Mr Radice transformed Selfridges' Oxford Street store, building more escalators and opening up the floors to colourful displays and themed weeks to stimulate shoppers' interest.

The company also has two stores in Manchester. Another is due to open in Birmingham in September, while others are set to follow in Glasgow, Leeds, Bristol and Newcastle.

In April Mr Cathcart sought to end the uncertainty over Mr Radice's departure by asking for preliminary bids by last Tuesday, but those positions have been refined by intense behind-the-scenes negotiations throughout last week and over the weekend.

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