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Selfridges soars on bid approach
LONDON, England (Reuters) -- Shares in up-market British department store Selfridges Plc soared more than 20 percent to a nine-month high on Thursday after the 100-year-old firm revealed late on Wednesday it had received a takeover approach. Selfridges, best known for its flagship store on London's Oxford Street, remained tight-lipped about potential suitors. But speculation grew that Scottish entrepreneur Tom Hunter was the interested party, although his spokesman refused to comment. The retailer said on Wednesday the offer was substantially above Tuesday's closing market value of 378 million pounds ($587 million). Analysts said the offer was likely to come in around 350 pence a share, valuing the firm around 540 million pounds. Shares in Selfridges had lost some of their steam to trade 52 pence or 20.2 percent higher at 310p by 0940 GMT -- off the high of 319p. The approach led investment bank Smith Barney to raise its price target to 310p from 270p and keep its ``outperform'' rating. "The raised target reflects the increased probability of realising fundamental value inherent in the group's property through a change in corporate control,'' it said in a note. Hunter on the prowl?Hunter, who started his Sports Division clothing business from his father's garage in 1984 before selling it to JJB Sports Plc 14 years later for 290 million pounds, has been on the prowl for retail acquisitions for several months. Earlier this year he was forced to back down from bidding for Britain's third-largest department store chain House of Fraser after being rebuffed by its management. He also failed to buy struggling department store operator Allders. "He's got the cash, he's got the interest and he's probably got a bit to prove after the failed House of Fraser approach,'' said Abid Riaz, retail analyst at WestLB Panmure. But one analyst said it could be several weeks before an offer was put on the table. "He would wish to do due diligence, and our view is that in that case nothing might happen for another four to six weeks,'' said Richard Ratner, retail analyst at broker Seymour Pierce. The chic store, which sells everything from luxury food to underwear including an exclusive range of lingerie designed by pop star Kylie Minogue, has one shop in London and two in Manchester, northwest England. It is on track to open another in September in Birmingham, central England. Eventually, Selfridges wants about eight stores across the country. The next will be in Glasgow, Scotland and the company is also negotiating sites in Bristol, Leeds and Newcastle. Merrill Lynch, which is advising Selfridges, declined to comment on Thursday. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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