By and  on November 12, 2007

LONDON — Baugur Group, the Icelandic retail conglomerate with stakes in London fashion labels including Matthew Williamson and PPQ, has retained NM Rothschild and Financo Inc., an investment banking firm in the U.S., to help advise on its proposed bid for Saks Inc.

Sources in New York confirmed Financo's involvement. An official at the New York-based investment bank declined comment.

According to an unsourced report in the Sunday Times of London, Baugur is also working with Sir Tom Hunter, the billionaire Scottish entrepreneur with whom it has done several deals in the past.

Spokesmen for Baugur, Hunter and Rothschild could not be reached for comment Sunday.

WWD first reported last month that Saks was getting ready to entertain suitors. A spokeswoman at the time declined comment.

One of the firms that has been long considered a strong candidate to pursue Saks is Baugur, in part because it took an 8.1 percent stake in Saks in July to become the company's second-largest investor.

Sources in the U.S. said that Baugur had preliminary courtship talks with Saks about six weeks ago regarding its interest in the luxury retailer.

Baugur is believed to be considering an offer for Saks worth between $26 and $30 a share, or about $3.7 billion to $4.3 billion.

Many on Wall Street believe that Saks is in a unique position, since it is the only true luxury retailer left potentially on the market now that both Neiman Marcus and Barneys New York have been sold. But how good an offer Saks can garner in the current economic backdrop isn't clear. Many deals are still not getting done due to the extended summer vacation by the credit markets due to the subprime malaise overhang. Financial sources, including bankers, said last week that some retailers eyed by private equity firms were getting offers based on valuations at half the typical multiple range, in part because of the lack of availability in financing.

Baugur last month made a regulatory filing confirming WWD's story regarding its interest in Saks. The Icelandic firm also disclosed in the Securities and Exchange Commission filing that it might pursue a joint bid with the Dubai-owned Landmark Group. Landmark, which also owns shares of Saks, has had "exploratory discussions" with Baugur, according to the filing.WWD also was first to report that West Coast Capital could be a possible Baugur financial partner in an investment in Saks. West Coast was launched in 2001 by Scottish multimillionaire Sir Tom Hunter. When contacted last month, a spokesman for West Coast said the firm has no intention on bidding for the retailer, but did not say that it also had no interest in providing financing for a deal if one came to fruition.

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