I notice that the newspapers are carrying more stories this week on the bids that private-equity consortia are making on high street retailers – the latest one being the bid for Kesa Electricals (they own the Comet stores and were part of Kingfisher until 2003) by a consortium apparently led by KKR and (possibly also) Permira. (Covered in lots of papers naturally, but the Business Telegraph page is concise).
These are pretty significant deals – this latest one apparently around £1.7bn – and hot on the heels of the rejected bid for HMV (also by Permira) this week. One thing's for sure – the market likes the optimism from the PE firms as shares in retailers strengthened, presumably because of expectations that more take-over activity is on the way – it was also only recently that House of Fraser was in the sites of Apax Partners. Kingfisher shares became the best performer in the FTSE 100 this week. And of course Archie Norman and John von Spreckelsen (former CEO of Somerfield) are setting up separate buy-out funds to take on companies in distress – presumably retailers as their primary targets.
It'll be fascinating to see when and where this will all end – it seems to be a pretty congested marketplace. It'll also be interesting to see where the primary focus of post-acquisition activity will be… Shaking up the management teams one assumes.
Check out the Retail Bulletin website which is a useful round up of all things retail.