House of Fraser 'accepts' indicative takeover offer

24-08-2006

Department store chain House of Fraser has allegedly accepted an indicative takeover offer from Icelandic retail investor Baugur.

The proposed bid is said to be worth £356 million and values House of Fraser at 150 pence a share, according to a report in the Daily Telegraph.

The newspaper said that the retailer's decision to approve the initial offer would see Baugur granted access to the company's financial books so that it can weigh up a formal bid.

It is claimed that Baugur has now entered into a process of due diligence that is expected to last around six weeks.

A firm offer could be made by the Icelandic investor by mid-August, reports suggest.

House of Fraser told its shareholders on May 2nd that it had received a "very preliminary" takeover approach from an unnamed third party.

Baugur's interest in the retailer first emerged in April, when the company purchased a stake of almost ten per cent in the department store chain.

The Icelandic company, which also has investments in British retailer Woolworths and toy store Hamleys, confirmed on May 26th that it was considering making an offer for House of Fraser.

The reported development comes just weeks after talks between House of Fraser and private equity house Apax Partners broke down.

A spokesman for House of Fraser refused to comment on reports of the takeover offer, while Baugur could not be reached to verify the claims.


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