Fayed pays pounds 52m for Alpha stake

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Mohamed Al Fayed, the chairman of Harrods, has paid pounds 52m for a 25 per cent stake in Alpha Airports in an attempt to extend Harrods' airport retailing operations. Alpha has 80 shops in the UK and the US.

Mr Fayed has bought the Alpha stake from Granada using one of his private companies, Cylena Establishments, rather than through Harrods. Cylena said last night that in the absence of a third party offer, it would not make an offer for the remaining shares of Alpha for at least six months.

Harrods already owns "signature shops" in Japan, Hong Kong and Singapore, and runs tax-free shops in Heathrow, as well as airports in Hamburg, Vienna and Frankfurt.

Alpha Retail Services, with a turnover in 1995/96 of nearly pounds 300m, operates an extensive range of duty and tax-free shops in airports, many of which are simply called "Duty Free Shopping". Alpha also operates airport shops under licence from Drugstore, Swatch, Lillywhites, Timberland, The Beauty Centre and others.

It is understood that Mr Fayed believes that Alpha's other two operating divisions may also enjoy synergies with some of his other interests.

Alpha Ground Services has more than 50 airport locations in the US with a combined turnover of pounds 42.4m, while Mr Fayed owns Metro Business Aviation, previously Hunting Aviation, which provides ground services at Heathrow. Alpha also provides in-flight catering, providing 40 million meals a year to 100 airlines.

Alpha said the sale via Lazards to Mr Fayed came as "an unexpected development".

"We have had no discussion or contact with Mr Fayed. Certainly we would want to meet with him as soon as possible."

There had been speculation recently that BAA may have been interested in the Alpha stake. Granada acquired the stake when it bought Forte.