Retail

Boots/Pessina conflict: another twist

15 Mar 2007

As bidder and insider, the deputy chairman isn t aligned with other investors. But there s arguably more of a conflict with his backer, KKR. Why? Because by partly cashing in, Pessina gains from a higher price. And if another bid emerges, he has left himself room to shop around.

Dick’s Sporting Goods looks like a champ

14 Mar 2007

US retail sales are slacking off. But the $2.8bn sportsgoods retailer managed to exceed Wall Street's expectations with its latest results. Unlike some retailers, Dick's has yet to saturate the market with its stores. Longterm, its shares could be a slamdunk for investors.

Merrill’s defection in Boots bid battle makes sense

14 Mar 2007

The bank was broker to Alliance Boots. But its relationship was with the UK healthcare group's deputy chairman, who's bidding alongside KKR. Normally boards are paranoid about advisers switching sides. But that s not an issue here. And for Merrill, KKR is a client worth nurturing.

Stub equity could salve Alliance Boots conflicts

13 Mar 2007

Investors worry the deputy chairman, Pessina, will buy Boots on the cheap in cahoots with KKR. So why not let them share in the upside? Not all would want to accept "stub" equity and there would need to be a cash alternative. But it could be the best chance for a fair deal.

Big Lots shares price in big expectations

12 Mar 2007

Shares of discount retailer Big Lots jumped on news that KKR plans to take Dollar General private in a $7.3bn buyout. Like Dollar General, Big Lots specializes in hawking cheap merchandise. But its share price doesn t look like much of a bargain.

KKR still has room for Sainsbury’s

12 Mar 2007

The US buyout group has been on a shopping spree in the retail sector, tabling bids for two groups in two days worth $28bn. But KKR has huge firepower. Sure, it will end up with a big weighting to retail. But there's still room in its trolley for more.

KKR gets $7.3bn bargain with Dollar General

12 Mar 2007

On the face of it, this may not seem apparent. The bottomrung retailer s stock has been listless for years and its ebitda is falling. But if its turnaround works, the deal s a winner and illustrates how private equity can exploit the shorttermism of public markets.

Pessina big winner from Boots buyout

11 Mar 2007

The UK healthcare group s deputy chairman could emerge from a £10.2bn buyout with 40% of the company, compared to his current 15%. What s more, he wouldn t have to pay a penny to get more control of Alliance Boots such is the magic of leverage.

Hedge funds beat private equity to supermarket checkout

9 Mar 2007

Look what's happened at J Sainsbury and Carrefour: buyout firms spy an opportunity but before they can act, others drive up the price. It highlights the difficulty funds face in doing mega publictoprivate deals. The only way round it may be for them to be more aggressive.

Wal-Mart’s real bargains lie overseas

8 Mar 2007

The scandal over spying on critics is only its latest disaster. The US retailer is running into persistent and costly opposition. Shifting its focus to overseas expansion, and using cash from its domestic operations to fund that growth, would boost its value.

Arnault-Colony alliance snaps up Carrefour stake

7 Mar 2007

While the controlling family fought with the retailer s now binned chairman, the French billionaire and US property fund built a 10% stake. The Halleys may have forestalled a buyout, but ArnaultColony are likely to seek the same restructuring a private Carrefour would have.

Western manager tussles with Russian oligarch – and loses

1 Mar 2007

But what else would you expect? Especially as Brian Gilbertson was undermined at giant Russian miner Sual by his own ambition. His departure is a mixed blessing. He wasn t the best man to lead Sual s IPO. But his exit also highlights who has the whip at the group.

M&S gaffe shows dilemma over Sainsbury’s

1 Mar 2007

Stuart Rose s hint at a bid for rival Sainsbury s and the speedy uturn suggest a tough choice for the UK retailer. A deal with Sainsbury s could, on paper, be the best thing for M&S. But it could also be the worst, not least for Rose himself.

Carrefour chairman toyed with LBO – exclusive

28 Feb 2007

A E48bn buyout of the French retailer would make some sense on paper. But the dominant family of shareholders wants a higher price than bidders could afford. Without their support, no deal will be possible.

Lillywhites owner bags unorthodox £2.2bn IPO

27 Feb 2007

The float of Sports Direct may have shrugged off comparisons with the illfated IPO of Debenhams last year. But it s just as unusual. Sure, it's not a private equity quickflip but Sports Direct still has plenty of red flags. Investors may be too forgiving.

Should supermarket shareholders agree to buyouts?

26 Feb 2007

Private equity shops are circling grocers. It s easy to see why. Stable cash flows and abundant property makes them attractive targets. Shareholders may worry about selling too cheaply. But as US supermarket Kroger shows, a buyout offer can be their lowestrisk alternative.

New Look not yet a private-equity pin-up

26 Feb 2007

Permira boss Damon Buffini says the UK fashion retailer is an example of how private equity can grow businesses and create jobs. But fashion is fickle. It s too soon to tell whether New Look s journey is the real deal, or an unsustainable dash for growth.

Polygon bets on a Sainsbury bid

20 Feb 2007

The appearance of the hedge fund on J Sainsbury s share register suggests its confident a buyout of the UK supermarket group will work out. But how much upside is there? A private equity bid at 550p stacks up; any more looks a stretch. But that s not a bad return for a risk arb.

Carrefour board rift could hinder turnaround

15 Feb 2007

This is the wrong time for a battle. Carrefour s turnaround is far from over and the stock has been underperforming. A fight may be brewing between the family that owns 13% of the French retailer and the company s chairman.

J Sainsbury shouldn’t open its books to CVC

9 Feb 2007

At least not until the private equity bidder shows it s serious by coming up with a price and the assumptions used to reach it. There s a case for saying that Sainsbury s doesn t need to open its books at all. It s a pretty simple business. But that might not be wise. At least not until the private equity bidder shows it s serious by coming up with a price and the assumptions used to reach it. One could argue that Sainsbury s doesn t need to open the books at all. It s quite a simple business. But that might not be tactically wise.