Hopes for the future of Waterford Wedgwood were raised last night as a little-known American private equity company said it was in advanced talks to buy the company.
New York-based KPS has signed a letter of intent, signalling its determination to secure a deal to buy many of the company's assets and potentially save 2,700 jobs in the UK and Ireland, said Deloitte, Waterford Wedgwood's administrators.
The firms are still weeks away from any agreement and it could yet founder over crucial issues such as price, but both sides are working to try to secure a deal by the end of January, a source familiar with the matter said.
KPS has been in talks with Waterford Wedgwood since last year, before the firm called in the administrators on Monday. "We commend KPS for its confidence in our company, and for the enormous amount of time, effort and resources expended by KPS globally that have resulted in reaching this important stage," said the pottery firm's chief executive David Sculley. "I look forward to working towards the successful completion of a deal."
KPS specialises in turnaround situations, and has bought businesses in other cyclical sectors that are suffering from the economic downturn such as US-based car parts manufacturers. It also prides itself on being union-friendly and being able to hold constructive discussions with labour representatives in the companies it buys.
However, Deloitte said it would continue to holds talks with other firms that have expressed an interest in buying all or part of Waterford Wedgwood. The accountancy firm has said it has received interest from at least 10 firms.
Among those that have asked Deloitte for information on Waterford Wedgwood since Monday are UK-based turnaround specialists such as the private equity grandee Jon Moulton's Alchemy Partners and Kensington-based Rutland Partners. US buyout houses Hilco, Oak Hill and Sun Cap-ital Partners are also understood to have expressed interest in all or parts of Waterford Wedgwood.
However, according to banking sources it is unlikely that many of these suitors will want to buy the whole company. It also remains to be seen whether they are genuinely enthusiastic to do a deal rather than just wanting information on the company as they scan for potential opportunities, according to people familiar with their thinking.
Waterford Wedgwood is chaired by Sir Anthony O'Reilly, the chief executive of Independent News & Media, the owner of The Independent.