Share trades help Kirkham's £507m DFS bid

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The Independent Online

Lord Kirkham's £507m attempt to take DFS private received a major boost yesterday after more than 12 per cent of the company changed hands just days before shareholders are due to vote on the 455p-per-share offer.

Lord Kirkham's £507m attempt to take DFS private received a major boost yesterday after more than 12 per cent of the company changed hands just days before shareholders are due to vote on the 455p-per-share offer.

Newton Management, the company's second biggest investor, yesterday sold its 10 per cent in DFS, while New Star Asset Management offloaded its 2.1 per cent holding. Both institutions have held DFS shares since it was floated 13 years ago.

Analysts said the move paved the way for shareholders to back Lord Kirkham's bid to acquire the group he founded more than three decades ago. Shares in the sofa group, which have long languished below the offer price, rose 15p to 451.25p.

City sources speculated that the 12.8 million shares - sold at 450p - were picked up by arbitrageurs, looking to make a quick turn on their money. As much as 50 per cent of the group is believed to be controlled by investors with a short-term view, such as hedge funds. Shareholders will vote on whether to accept the bid at an extraordinary meeting in Doncaster on Monday week.

Lord Kirkham has raised his offer for DFS three times so far, but even his latest bid has not been enough to persuade two of the company's biggest investors, Morley Fund Management, and M&G, to back him. Both shareholders have said they would prefer to retain their stakes in the hope that the highly competitive furniture market would recover. Yesterday, a spokeswoman for Morley said the group had no plans to change its mind.

Several analysts have argued Lord Kirkham's offer did not fully value the company, including Merrill Lynch and Dresdner Kleinwort Wasserstein.

Lord Kirkham said: "Newton has been a knowledgeable and supportive investor since the company floated. We would like to thank them for their support."

A spokesman for Newton said: "We believe that by selling now we are acting in the best interests of shareholders."

Lord Kirkham has threatened to step down as chairman if shareholders do not back his bid.

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