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Stodir Buys 39% Stake in Baugur

The Icelandic holding company Stodir has acquired a 39 percent stake in the investment company Baugur Group, a move that effectively consolidates the...

The Icelandic holding company Stodir has acquired a 39 percent stake in the investment company Baugur Group, a move that effectively consolidates the holdings of the Jóhannesson family, which controls Baugur.

This story first appeared in the July 8, 2008 issue of WWD.  Subscribe Today.

The move makes Stodir the largest shareholder in Baugur. Financial terms were not disclosed.

Baugur’s investments include contracts giving it the right to acquire an 8.58 percent stake in Saks Inc. and interests in House of Fraser; Mosaic Fashions, whose brands include Oasis and Karen Millen; Whistles, and Magasin du Nord.

Baugur executive chairman Jón Asgeir Jóhannesson and his family separately own the controlling stake in Stodir.

Baugur last month retained its right to acquire up to 12.2 million shares of Saks’ common stock at prices ranging from about $12 to about $23 a share. Shares on Monday closed at $9.65, down 12 cents or 1.2 percent.

Stodir was formerly known as the investment company FL Group, and the firm said Friday that its name change would reflect a shift in the company’s investment strategies, as it has moved from investing in Icelandic aviation and travel companies to a portfolio that now includes investments in Baugur; Glitnir Bank, an Iceland-based bank, and Landic Property, a Nordic real estate company. The company’s new name means support in Icelandic.

“The Baugur transaction is an important step in streamlining the focus of our business to create a powerful new holding company with a strong and diversified portfolio of investments,” said Jon Sigurdsson, chief executive officer of Stodir. “Baugur has established a strong portfolio in many well-known retail brands.”

Baugur said the company plans to relocate its headquarters to the U.K., although it has not set a specific date for the move. Last week, the company sold its remaining Icelandic asset, the retail holding company Hagar, back to the Jóhannesson family, who founded the company. Now, the U.K. accounts for 85 percent of Baugur’s investment portfolio, with the remainder split between the U.S. and Scandinavia.

A move to London would also mean that Jóhannesson will be able to continue to serve as a director of Baugur’s companies after his suspended sentence for bookkeeping offenses, which was upheld by Iceland’s Supreme Court in Reykjavik in June. Under Icelandic law, a conviction of any kind means an individual is prevented as serving as a director of a company there.

Baugur said of the move, “Not only will [a relocation to London] mean that the heart of the company will be where most of the company’s assets are, but [the company] will be at the center of the world’s most important financial community.”

The company added that the sale of Hagar means that Baugur is purely focused on retail. As reported, Baugur agreed to sell its media and technology assets and financial investments to two new independent companies, Stodir Invest and Styrkur Invest, in April.

Most of Baugur’s operations are already based in London, and company ceo Gunnar Sigurdsson and Baugur’s head of retail are also based there, a company spokeswoman said.

Baugur also said that like-for-like sales across its portfolio of retail investments had risen 4 percent for the year, compared with the same period last year, with profitability up 25 percent.