Outlook: One Allied calls time ...another gets rolled over

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The Independent Online
ALLIED CARPETS may have the careworn look of a council house shag pile these days but its recent experience shows that even a company as threadbare as this can have its attractions. That it is now being kicked around by Brown & Jackson, the South African group which brings you the Poundstretcher discount emporia, shows how grim things have got.

The tragedy of this saga is that Allied should be a good business. It is still the number two in the carpet market and has probably the highest brand recognition of any retailer in its sector. That it is now worth less than pounds 50m is due to fundamental mismanagement.

Brown & Jackson is the third suitor in less than a year to have a pop at Allied Carpets and, like the others before it, it is getting short shrift from the Allied board.

This time, though, things have got personal.

Brown & Jackson is not happy about being asked to sign an agreement promising not to make a hostile offer for at least a year in return for more detailed financial information.

Not one to pull their punches, the South Africans are saying in public what others have muttered in private before; that the Allied board, led by chairman Julian Lee, are more interested in protecting their jobs than securing best value for shareholders.

For its own part, Allied says that its new pounds 220,000-a-year chief executive, Geoff Brady, is just completing a review of the business and that, surprise, surprise, he likes what he sees.

He would quite like the opportunity to put his plans to the group's long- suffering shareholders, rather than be out on his ear after just a few weeks.

His shareholders may be ringing him before he gets the chance to pick up the phone to them, however. They might like to know why Allied is playing so coy after turning its nose up at Carpetright's 67p a share offer last year and a 55p offer from venture capital group Alchemy at a similar time. The shares have only gone south since. Shareholders must be chewing the carpet.