BC snaps up Phones 4u in private equity deal

Private equity firm BC Partners swooped to buy British mobile phone retailer Phones 4u yesterday, resurrecting a deal scrapped in December by seller Providence Equity Partners over a clash on price.

The value of the transaction between the two private equity players was not officially disclosed, but it is understood to be between 600 million and 700m. BC Partners did not lift its original bid, a source said.

A 430m high-yield bond was launched yesterday to bankroll the deal, Phones 4u said in statement. BC Partners submitted the only binding bid after initial interest from other private equity firms and trade buyers, people familiar with the process said.

Providence had sought 700m to 800m, according to reports. Providence acquired Phones 4u in 2006 alongside Doughty Hanson from founder John Caudwell for 1.46 billion. Doughty then took over Phones 4u's distribution business in a 347m deal.

After the latest sale was pulled three months ago, BC Partners re-stated its interest in the company and talks were revived early in 2011, one source said.

The deal is expected to close in April, BC Partners said. BC Partners, owner of Fitness First gyms and Turkish supermarket Migros, recently raised 2.5bn towards its latest buy-out fund, sources familiar with the situation said.

Tim Whiting, chief executive of Phones 4u, said he was "delighted" to have the backing of the company's new private equity owners.