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John Lovering keen on TPG Baugur bid

Debenhams chairman John Lovering has said that a Texas Pacific Group (TPG) bid to rescue Baugur's retail interests in the UK could offer 'interesting angles' for the department store group.

Lovering told Drapers that he wanted to see the future of the Baugur-backed Mosaic Fashions group safeguarded. Mosaic's brands include Warehouse, Principles, Coast, Oasis and the Shoe Studio Group, which have concessions in Debenhams.

He said: "It is possible that if TPG were successful [in buying Baugur’s debt or assets], it might offer interesting angles for Debenhams. We [Debenhams] are interested in ensuring the continuity of those Mosaic brands in Debenhams and would like to see the business fall into well-financed hands, whether that is TPG or another bidder."

Private equity firm TPG, which owns 12% of Debenhams, remains locked in a battle with Arcadia Group owner Sir Philip Green and other private equity firms to do a deal to buy shareholdings and/or debt in Baugur-linked retailers.

This includes a 49% Baugur-owned stake in Mosaic Fashions and a 20% shareholding owned by Icelandic bank Kaupthing, which went into administration earlier this month.
When pushed on whether he would favour a successful bid from TPG, Lovering said: "Well, it does have a 12% share in Debenhams."

However, Lovering stressed that competitive issues meant that he would not be able to invest in a TPG venture for Baugur himself.

Lovering is believed to be locked out of joining a TPG bid because Baugur also has a stake in department store chain House of Fraser, a key competitor to Debenhams.

But sources said that if TPG were to gain control of Mosaic it would give Debenhams more clout and control over its concessionaires, pointing out that if Green were to take the Mosaic business over, he would wield huge power over the majority of Debenhams' concession business, as his Topshop, Miss Selfridge and Wallis chains also have a presence there.

Meanwhile, sources close to Baugur told Drapers that the task of unravelling the complexities surrounding the shareholdings and holding companies with links to Baugur-backed retailers was proving to be a laborious task for potential buyers and slowing down the buying process.

One director of a Baugur-backed retailer said: "Common sense has prevailed; everything is slowing down and people are assessing the situation, and this is a good thing for all of us."

A second source close to Baugur added that it was likely to take weeks before a deal would be struck. He said: "It's a big business and it's going to take quite a bit of unravelling. I think some people thought they could get in there fast and do a quick deal, but they underestimated the power that the Icelandic government has
in this situation and the animosity between all the parties involved."

This week Green said that there was "no update" on the bid situation.

Sources close to Green said he was "biding his time" and that he would wait to see how the situation untangled.

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