Discount fashion retailer New Look today confirmed it had received an approach from founder Tom Singh regarding a possible offer to take the company private.
Singh, who founded the group in 1969, has put forward an indicative offer thought to be worth around £650m for New Look and is backed by private equity investment.
The non-executive director, whose family wealth has been estimated at £250m by the Sunday Times Rich List, announced in July that he had appointed financial advisers to review options for his family’s 28% stake in the business.
He was later forced to make a statement about his intentions following press speculation.
New Look said today that its board and its advisers were currently considering Singh’s proposal.
It said: “It should be emphasised that the proposal is preliminary in nature and is subject to a number of preconditions. Accordingly, there can be no certainty that an offer for the company will result.”
Shares in New Look, buoyed by takeover speculation, closed at 310p on Friday having soared in recent weeks.
The company has previously been linked in reports to a possible management buyout while City analysts have suggest private equity financiers are also circling the company, which recently snapped up French value retailer NewMim.
New Look, which is the UK’s third largest women’s clothing retailer, was already considered by analysts as an attractive acquisition target – possibly for foreign predators looking for a route into Britain.
Weymouth-based New Look has nearly 500 shops and is planning to pilot menswear ranges in 10 stores this autumn as it seeks to fill a gap in the market for cheaper menswear.
The offer to buy out New Look is thought to include the company’s management team with chief executive Stephen Sunnocks expected to join Singh’s bid.
References: EGi News 01/09/03
