Debenhams plc, the U.K. department store chain that is being pursued by two potential buyers, saw profits dip 0.6 percent in the year ended Aug. 30.
Income slipped to $179.9 million from $180.9 million as extraordinary costs linked to the two offers for the company, including advisory fees, exacted a $29.1 million toll on profits.
Dollar figures have been converted from the pound at current exchange as Debenhams reported profits of 108.4 million pounds and exceptional costs of 17.4 million pounds.
As reported, CVC Capital Partners and Texas Pacific Group trumped rival Permira, a private equity fund, with a $7.55, or 4.55 pound, per share cash bid, valuing Debenhams at $2.76 billion, or 1.66 billion pounds.
Permira had bid $7.10, or 4.25 pounds, per share. However, a spokeswoman for the company confirmed that a rival offer for Debenhams could come within the next few weeks.
Permira is working with Debenhams chief executive Belinda Earl and her team on a management buyout. Both Permira and CVC/TPG are planning to de-list the store if they buy it. CVC is a pan-European private equity group while TPG specializes in both private and public investments.
Permira’s new offer will have to come soon: At the request of CVC/TPG, which wants to seal the deal before the crucial Christmas trading season begins, Debenhams has scheduled an extraordinary general shareholders meeting for Nov. 10.
At that meeting, shareholders will be asked, under a special arrangement, to vote immediately on the CVC/TPG bid. However that meeting would be called off if a rival bid comes through from Permira and is recommended by the Debenhams board.
“The board expects that a conclusion will be reached in the near future both for the benefit of shareholders and for the good of the business,” said Peter Jarvis, Debenhams’ chairman.
Sales at Debenhams rose 6.7 percent to $3 billion, or 1.81 billion pounds, from $2.8 billion, or 1.69 billion pounds, with comparable-store sales up 3.7 percent. The firm said strong women’s wear results and hot summer weather were the principal forces behind the sales increase.Jarvis said that Debenhams’ share of the U.K. department store market is now 14.6 percent. The store now has 3.5 percent of the U.K. clothing market.
During the period, the company opened five stores in Perth, Redditch, Basingstoke, Inverness and East Kilbride, adding 2.2 percent to total sales and bringing the total number of stores in the U.K. and Republic of Ireland to 104, with trading space of 7.95 million square feet. In addition, the company has 10 international franchise stores in East Asia and in northern and central Europe.
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