Hunter drops House of Fraser offer
Department store group sticks to strategy
January 24 2003
Entrepreneur Tom Hunter has decied not to proceed with a bid for department store group House of Fraser.
Hunter’s company TBH Investments announced its decision a few hours before the noon deadlines set by the Takeover Panel to either withdraw the provisional offer made before Christmas or proceed with a formal bid.
Hunter said: “We approached the management of HoF with a fully funded offer of 85p per share, which in our view fully valued the HoF shares and represented, both then and now, a substantial premium for their shareholders.
‘We have sought the co-operation of HoF’s management to proceed with this offer but they have consistently refused to enter into substantive discussions at that price. As a result we have decided not to proceed with our offer.
“We remain a significant shareholder in HoF and look forward to hearing management’s proposals to deliver value in excess of our 85p offer.”
The HoF board has argued strongly that Hunter’s offer undervalued the business. Chief Executive, John Coleman, said: “The board remains as convinced as ever in our strategy of brand development, targeted investment in our existing store portfolio and new store opening programme. We expect this, coupled with continued cost control, will deliver enhanced shareholder value.
“As stated in the company’s trading statement on January 9 2003, the company is confident of a satisfactory trading outcome for the 52 weeks ending January 25 2003. In particular I would like to thank all of our employees for their continued commitment and focus through Christmas and beyond.”
Under Takeover Panel rules, Hunter is now blocked form bidding for HoF for six months unless a rival offer emerges. Hunter also holds a stake of more that 10 per cent in rival chain Allders.
