Wickes rejects Focus bid as 'ludicrous'

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The Independent Online

Wickes, the diy chain, yesterday hit back at a £285m hostile bid from rival Focus Do-It-All, saying it was pitched at a "ludicrously" low level.

Issuing its defence document, Wickes said that the 375p a share cash offer "completely fails to recognise the excellent prospects of the business and the high strategic value of Wickes in any process of industry consolidation".

Bill Grimsey, Wickes chief executive, said: "We can succeed as an independent business. We are the market leader in heavy building materials. We're very focused."

Mr Grimsey would put a "fair value" on Wickes or say whether the group was in talks with another party. In the defence document, Wickes points to an average historic price-to-earnings multiple for UK retailers which would value the group at about 520p a share. FDIA has already offered 385p a share for an agreed deal. Wickes shares yesterday closed down 10p at 390p.

Mr Grimsey said that the investment injected in the turnaround plan for Wickes, following accounting irregularities discovered under previous management in 1996, was beginning to see benefits flow through. Wickes has invested £89m over the last three years.

"We are determined that FDIA will not grab the benefits of this investment on the cheap," he said.

Nick Bubb, an analyst at SG Securities said: "Wickes has no pressing need in the short-term for consolidation. It's clear that Focus needs a deal much more. Wickes is a bigger and better company. But cash is king. A more realistic offer would need to be nearer £5."