Hunter holds fire on House of Fraser move

Published on Sunday 12 January 2003 00:00

TOM Hunter will not make a move on House of Fraser until after shareholders in rival department store group Allders vote on the £132m takeover bid from Minerva vehicle Scarlett Retail on Wednesday.

On Friday Hunter was given two weeks to make a formal offer for the department store group or walk away.

Hunter remained tight-lipped on Friday but sources close to the entrepreneur said: "He’s watching and waiting."

The Takeover Panel set a deadline of January 24 after being approached by the retailer’s financial advisers Dresdner Kleinwort Wasserstein.

It added Hunter would have to stay on the sidelines for six months if he decided against making a formal bid before the cut-off date.

Hunter unveiled a proposed 197m bid for House of Fraser in December, valuing the business at 85p per share.

But while delivering its Christmas sales figures on Thursday, the group reiterated that the bid needed to be raised before it would agree to talks.

The Takeover Panel’s ruling came as property developer Minerva said its shareholders had approved its bid for House of Fraser rival Allders. Minerva is backing a 132m takeover led by Terry Green, the former Bhs and Debenhams boss. Allders investors have a week to accept.

Hunter said on Tuesday he was considering a counter bid for the chain and some believe he wants to merge it with House of Fraser.

Last week House of Fraser said it had achieved a "creditable performance" in the run-up to Christmas with like-for-like sales up 2.2%.

The top line showed like-for-like sales up 1.6% in the 23 weeks to January 4; actual growth at the Rackhams, Binns and Army & Navy group was just 0.5%.

Though better than some rivals’ dismal Decembers, the figures reinforced the City view that Fraser failed to participate fully in the UK consumer boom and is not immune to its downturn.

Chief executive John Coleman also unveiled 4m worth of cost savings - a move analysts believe could force up the asking price. He said: "I’ve focused on driving House of Fraser as hard as I can and am not worried about what other people are trying to do."

Hunter has already built up a 6.95% stake in the chain and has a 7.95% shareholding in Allders. House of Fraser’s shares closed at 86p on Friday after they hit a low for last year of 46.25p at the beginning of October.

Friends of Hunter said yesterday he was in two minds about how to proceed. One said: "He is very serious, he is very, very keen, but the question is, is he up for a fight?"

A spokesman for Hunter told Scotland on Sunday: "We are considering our position and have no further comment to make."