Woolies halts Peacock tie-up talks
WOOLWORTHS has held merger talks with discount clothing retailer Peacock Group but abandoned negotiations at an early stage. Confirmation of the talks highlights the flurry of corporate activity at Woolies, which has also held talks to merge with entrepreneur Philip Green's Bhs.
Sources close to Peacock, one of Woolies' main suppliers, confirmed exploratory negotiations had taken place in recent weeks but were quickly abandoned. Peacock is more hopeful about ongoing talks with rival retailer Bon Marche, which are likely to value the Huddersfield-based discount operator at £80m including about £20m of debt.
The privately-owned bid target trades through 250 women's stores branded bonmarche and targets women aged over 45 as it customers. A deal would reap a £42m windfall for founding brothers Gurchait and Gurnaik Chima. They own 70% of the business while chief executive Steve Bullas holds a 10% stake.
Venture capitalists Friends Ivory & Sime Private Equity bought a 20% stake last year in a deal that included a £41m injection of debt and equity.
Peacock said it was working on a deal that would be funded through bank debt and Peacocks shares. Shares in Peacock, which is being advised on the transaction by Investec Henderson Crosthwaite, on Monday edged up 1 1/2p to 130 1/2p. Bon Marche made pre-tax profits of £7.6m last year, up £5.7m before, while sales jumped 15% to £129m.
