Debs delight

23 October 2003

In retrospect, letting the retailer s management work with Permira and risking £6m to lure CVC into the race look like good moves. After all, Debenhams has snared a premium of over 40% and Permira has limped out the loser.

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Laragrove, the private equity consortium led by Permira, has withdrawn from the bidding for Debenhams. That comes after rival bidder Baroness Retail – made up of CVC Capital, Texas Pacific Group and Merrill Lynch increased its offer for Debenhams to 470p a share from 455p a share.

Baroness' offer values the UK retailer's equity at £1.7bn. As a condition for raising its bid, Baroness has managed double the break fee it is set to receive if its offer gets trumped to about £17m – or 1% of Debenhams' equity.

Baroness increased its offer – which was already the highest on the table – at a time when one of Permira's partners, Goldman Sachs, had shied away from making a higher offer for Debenhams. Goldman was supposed to provide 21% of the equity for Permira's consortium.

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