Goldman's cold feet

21 October 2003

The investment bank is apparently ready to drop out of the £1.8bn takeover on the grounds that the price for the UK retailer is too steep. That means Permira and Blackstone will have to rustle up more equity and take more risk if they want to stay in the race.

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Goldman Sachs is likely not to be an equity partner in a higher bid for Debenhams, according to a person familiar with the situation. The investment bank was supposed to provide 21% of the equity in the Laragrove consortium with private equity houses Permira and Blackstone.

Laragrove have not yet put out a statement dropping out of the race. They would be obliged to do so if they were no longer considering the possibility of making a higher offer. So far, the highest bid on the table is for 455p a share, from rival private equity bidders CVC Capital and Texas Pacific Group. The Takeover Panel has given both bidders until the end of October to raise their bid. At that point, should it be required, the Panel will run an auction for the UK retailer.

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