Fashionable buy

12 May 2003

UK department store M&A has reached fever pitch. Debenhams is the latest target, following Selfridges, Allders and House of Fraser. Small, midmarket department stores have long been ripe for consolidation. Permira might want a seat at the table.

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Debenhams said it had received an approach from Permira Advisers, the private equity group, valuing the UK department store chain at around £1.5bn. Permira's indicative offer is for 425p a share. That is a premium of 28% to the closing price on Friday. Debenhams said its management will work with Permira.

Meanwhile, Galen Weston, the Canadian billionaire, has made a £598m agreed bid for Selfridges. The UK department store's shareholders will get 387p a share plus a 5.25p dividend. Weston will also take on Selfridges' £30m of debt. Weston says that he has no plans to change Selfridges' strategy or management.

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