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Sir Terry Leahy in talks with Chinese firm for New Look bid

Former Tesco boss Sir Terry Leahy’s investment firm Clayton, Dubilier & Rice has reportedly held discussions with Chinese private equity group CDH about a joint offer for New Look.

According to Sky News, CD&R, which counts Leahy as a senior advisor, contacted CDH to pull together a £2bn bid for the high street chain.

It is not clear whether Leahy, who left Tesco after 14 years in 2011, is directly involved in the talks.

China is one of New Look’s key growth markets and has 18 stores in the country as well as selling through Alibaba’s Tmall website. It intends to open another 50 shops in China by the end of the next financial year.

Last month the fashion retailer’s private equity owners Apax and Permira reportedly held talks with another Chinese investor- Fosun, which backs Thomas Cook.

A sale or IPO are likely options for the young fashion business. In February New Look chief executive Anders Kristiansen hinted that the retailer was “strong enough” to make another attempt at a stock market flotation, but said the decision rests with its private equity owners.

Kristiansen said the chain, which pulled out of a planned initial public offering (IPO) in 2010 amid turbulent financial markets, was in a “strong position” regarding trading and would not rule out a possible flotation either this year or next.  

The retailer later hired JP Morgan to pursue a stock market flotation in the region of £2bn.

Private equity firms Apax and Permira bought a majority stake in New Look for £800m in 2004.

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