DFS agrees to £496m buyout by Kirkham
DFS Furniture has agreed to a £496m buyout by its founder and chairman, Lord Kirkham.
DFS Furniture has agreed to a £496m buyout by its founder and chairman, Lord Kirkham.
The company's independent directors said yesterday they had agreed to accept Lord Kirkham's offer of 445p per share cash. DFS shares ended up 8p yesterday at 443.5p.
The offer represents a premium of about 9 per cent to DFS's closing price on 3 March, the day before DFS said it had received an approach from Lord Kirkham.
The Conservative peer founded DFS in 1969 and floated the company on the London Stock Exchange in November 1993. He said that DFS would be better able to tackle slipping sales and difficult trading conditions as a non-listed company, and had increased the value of his buyout bid from an original 415p offer in March.
The latest 445p-a-share offer includes 10p-a-share of cash from a VAT dispute DFS won in the Court of Appeal. Lord Kirkham has also agreed to distribute any further disputed VAT payments DFS might recover. Competition in the furniture trade has been intense and DFS has been hit by aggressive discounting from rivals who have slashed prices to shift stock. DFS said yesterday that trading remained difficult and added it expected 2004's underlying pre-tax profits to fall to £51m from £56.4m last year.
The investment banks Hawkpoint, Nomura and Teather & Greenwood are helping advise Lord Kirkham. Citigroup and Deutsche Bank are DFS's advisers. It expects to hold an extraordinary meeting to approve the sale in September.
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