Small but beautiful: Galiform settles MFI dispute for £8m but shares dip

SHARES in Galiform, the joinery and kitchen group, dipped 1.6 per cent despite the firm agreeing to pay Merchant Equity Partners an £8 million settlement related to MEP's takeover of the MFI retail business in 2006.

MEP had originally demanded 57m from Galiform in a net asset value claim arising from the sale of MFI's retail business to MEP.

After selling the shops, which continued to trade under the MFI brand, the remaining part of the group, which had been known as MFI Furniture Group, changed its name to Galiform.

Matthew Ingle, Galiform's chief executive, said: "We are pleased to have settled this dispute for 8m, a small fraction of the original 57m claim. Not only does this demonstrate the strength of our case, it avoids a long, expensive and distracting process, provides closure on this issue and is well within the provision we made."

Galiform, which has a market cap of about 206m, is the parent company of Howdens Joinery, which supplies kitchens and joinery to trade customers.

The group said the settlement was in line with its previous guidance on the likely amount.