Canada's Galen Weston wades into bidding war for Selfridges

By Amy Frizell
Friday 24 January 2014 02:50

The Canadian billionaire Galen Weston is believed to be considering a bid for Selfridges, put into play earlier this month, after the upmarket department store group admitted it had received a takeover approach.

Galen Weston, the son of Garfield Weston who established Associated British Foods in Britain, already owns Dublin's landmark department store Brown Thomas. It is believed that he would combine the two stores if he succeeded in winning Selfridges.

Mr Weston's interest in Selfridges follows an approach from Tom Hunter, the Scottish retail entrepreneur, which triggered a 22 per cent jump in Selfridges' share price when news of his interest emerged almost a fortnight ago.

Selfridges's advisers, Merrill Lynch, are understood to have given limited financial information about the group to a number of potential bidders last week. Minerva, which out bid Mr Hunter for the department store chain Allders earlier this year, is among property groups that are believed to be considering a bid. Peter Williams, Selfridges's recently appointed chief executive, is also considering a buyout offer for Selfridges.

City analysts believe that bids would need to be pitched at about 340p a share to succeed. As well as its flagship store in Oxford Street, Selfridges has two stores in Manchester and is due to open a fourth in Birmingham this September. It is also considering opening stores in Leeds, Bristol, Newcastle and Glasgow.

The property freeholds and leases alone are estimated to be worth between 250p and 300p a share. Shares in Selfridges closed at 325p on Thursday, giving it a market value of £504m.

The Oxford Street site – which includes a car park and hotel as well as the 350,000 sq ft Selfridges store – has a book value dating back to February 2001 of £358m. The group is expected to get planning permission for a scheme to redevelop the site later this year which analysts estimate could add another £50m to the value of site. Selfridges also owns long leases on its stores in the North of England and part of the freehold of a site in Glasgow, where it plans to open a store by 2007.

The company declined to comment on the identity of potential bidders yesterday. When it confirmed it had received an approach 10 days ago it noted that the offer was subject to a number of conditions "and there can be no assurance that an offer will ultimately be made".

Mr Hunter made his fortune from selling Sports Division to JJB Sports for £290m in 1998. Galen Weston is Canada's second-wealthiest man, with a fortune worth C$9bn (£4bn) according to Canadian Business magazine. He was born in England in 1940 but lives in Canada has kept a low profile since an IRA kidnap attempt in the 1980s.

Galen Weston became chairman of the family controlled group George Weston and the grocery giant Loblaw in 1978 when Garfield Weston died. His late brother Garry was put in charge of AB Foods, the Ryvita to Twinings teas giant.

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