Jon Moulton, founder of private equity firm Alchemy Partners, has hinted he could be interested in buying Baugur’s stake in House of Fraser.
Jon Moulton said in an interview on BBC Radio 4’s Today programme this morning that he was “interested” in “the most attractive” parts of Baugur’s empire. When asked specifically if he was interested in House of Fraser, Moulton said “We could be”.
Moulton declined to comment further, citing competitive reasons but said he hoped Alchemy would pick up some pieces from the Baugur empire in the next few weeks and months.
“It would be fair to say we would like to be picking up some pieces of the [Baugur]empire.”
Jon Moulton, managing partner, Alchemy Partners
If Moulton were to make a play to take a stake in House of Fraser, Landsbanki, the Icelandic bank that is putting Baugur into administration, would be obliged to offer the shares first to House of Fraser’s existing shareholders, because of pre-emption rights.
House of Fraser chairman Don McCarthy is believed to be keen to take over Baugur’s stake in the department store. McCarthy already holds a 19.4% stake in House of Fraser. Under the pre-emption rights, McCarthy would be given first refusal on the shares.
Yesterday Landsbanki seized control of many of Baugur’s shareholdings, including its 34.5% stake in House of Fraser, to prevent Baugur from holding a fire sale of its assets to raise money. Landsbanki appointed PricewaterhouseCoopers to hold the shareholdings.
However Landsbanki has repeatedly said it supports the management at House of Fraser and that it would hold on to the assets to ensure it could realise maximum value from them. This could mean it waits until the market has improved to sell the shares.
Listen to the Moulton interview on the BBC iPlayer or read the transcript below. The interview starts 20 minutes in to the Today programme.
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Moulton interview transcript
Which parts of Baugur have you got your eye on?
“The most attractive ones.”
You previously owned the jewellery chain Goldsmiths, is that of interest?
“On two occasions [we owned it] actually. It’s certainly of interest, yes.”
“There are other bits of the group that we are interested in, but for obvious reasons we are not too keen on discussing it for competitive concerns.”
So would you have any interest, for example, in buying a department store, like House of Fraser?
“We could have, but I really am not going to elaborate any further.”
So how far in are you with this? Have you had any talks with Icelandic authorities?
“We have been in talks for several months now.”
How much of a difference does the fact that Baugur has collapsed make to your interest in buying bits of the company?
“Well most of the companies are not worth the debt that is associated with them and Baugur owned the equity which was pretty well worthless, so it makes it mechanically easier to deal directly with the debt players than with Baugur.”
Is it fair to say that you would be disappointed if you didn’t pick up parts of the Baugur empire in the next few weeks and months?
“It would be fair to say we would like to be picking up some pieces of the empire.”