Harris in £850m Carpetright bid

Carpetright's shares surged yesterday after Lord Harris, the chairman and chief executive, indicated he could make a cash bid of £12.50 a share for the retailer.

The proposal, which would value the company at £850m, comes after Lord Harris was given the go-ahead to explore a take-private deal with senior management in the summer. The indicative offer comes at a premium of 7.7 per cent to Monday's closing share price of £11.61.

It was put up on the day the company reported a fall in same-store sales at its UK shops. For the 23 weeks to 6 October, UK sales on a like-for-like basis. excluding new store openings, fell by 0.8 per cent.

But the company said its gross margin had improved by 1 per cent and overall group sales were up when taking into account new store openings, of which there have been four in the UK and three in Europe.

Lord Harris said: "It's tough out there and I don't see that changing. That isn't trying to persuade people to sell, it's just a fact."

He said his proposal, funded by borrowing, is backed by Olayan, the Saudi group that holds 14.9 per cent of the company's shares.

The shares finished the day up 54p at £12.15.