Under the hammer

2 October 2003

Plain sealed bids can extract the highest prices. But they also produce erratic results. In theory, there’s less wrong with "formula" sealed bids where the winner pays the second price plus a margin. But open auctions are best.

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Debenhams has received a 455p a share offer from private equity houses CVC and Texas Pacific Group. The department store group's shareholders are scheduled to vote on the offer on November 10. Permira, a rival private equity group, had earlier made a 425p a share offer and has not yet bowed out.

The Takeover Panel is considering imposing a cut off point for Permira to bid before the extraordinary general meeting on November 10. If the private equity group does come back, and CVC doesn't drop out, the panel is reportedly considering setting up an auction process to try and curtail the process.

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