Tchenguiz under pressure to make Selfridges bid

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The Independent Online

The Iranian property tycoon Robert Tchenguiz will this week come under renewed pressure to trump the Canadian Galen Weston's £598m offer for the upmarket Selfridges department store group or walk away from the bidding table.

Sources yesterday said a "lot of work" was still being done by Mr Tchenguiz's team, ahead of the 5 June deadline for shareholders to vote on the 392p-a-share offer already on the table from Mr Weston.

Mr Tchenguiz and his bidding consortium, led by the investment group Aletheia Partners, would have to offer more than £600m for the London-based retailer. It is thought likely an approach, if made at all, will have to come this week.

Hopes in the market of a better offer from Mr Tchenguiz, however, seemed to have faded towards the end of last week. Two weeks have now passed since the consortium officially announced plans to make a "competing offer" for the company.

While bid speculation on the retailer pushed Selfridges shares higher in recent weeks, the stock closed on Friday at 393p, close to Mr Weston's offer, suggesting the deal on the table is unlikely to be beaten.

The Weston consortium already owns 10 per cent of Selfridges, it has the support of the board and about £6m would have to go to Mr Weston in a break fee if the board chose to recommend another bidder.

Support for taking on a deal of this magnitude is thought to be on the wane among Mr Tchenguiz's backers, and many in the City believe he would end up overpaying for the retailer.

The Weston camp is likely to wait for any developments from third party before making a decision to raise its bid.

But its offer is not yet final, despite its recommendation by the board, meaning there is still room for the Canadian billionaire to reconsider his proposal should another bid come to the board.

The Tchenguiz consortium has nine days in which to make a formal bid, indicate that it is ready to bid or walk away from the proceedings.

It is thought Mr Tchenguiz, whose property company, Rotch, owns Odeon cinemas and some Hilton hotels, is busy working on plans to split Selfridges into two separate companies, one owning and managing the properties and the other running the retail business. The operating company could be refloated on the stock exchange.

Mr Tchenguiz's bid plans were complicated last week when the Financial Services Authority began investigating sales of Selfridges' shares by Mr Tchenguiz's father, Victor, in April. Victor Tchenguiz has denied any wrongdoing.