Dawn raid boosts House of Fraser
UK department store group House of Fraser shares sparked back to life today after a “dawn raid” for the company’s stock reignited speculation about a potential takeover.
The department store group saw its share price rise 8% as analysts speculated about the parties involved in a large chunk of its stock changing hands.
The move – said to be for around 6% of the business – is known as a “dawn raid” as it involved a swoop on the market in double-quick time.
Private equity firm Apax was immediately linked as it was thought to have been the party behind takeover talks which collapsed last month. As it made no formal offer to the market it would not be excluded from returning, although Richard Ratner of Seymour Pierce stockbrokers said a further crack was unlikely.
He placed a value of 160p a share – equivalent to £380m (€544m) – on Fraser, although he added the structure of the group made a valuation difficult.
Shares rose 10.5p to 135p following the developments today.
Mr Ratner said: “We put a ball-park figure of 160p a share on the company, although we suspect that a bidder would want to pay less. Equally, we do not believe that any offer of less than 150p would stand a chance of being accepted.”
House of Fraser owns 60 stores around the UK in locations such as Edinburgh and Leeds, as well as a solitary branch in Ireland in Dublin.
It said like-for-like sales fell 3.9% during the year to January 28, but the rate of decline slowed to 1.3% in the seven weeks that followed. Profits in the last financial year were up 4.6% at £27.3m (€39.1m).
