House of Fraser bid target

House of Fraser has been a bid target since 1996, when John Col eman took the job of chief executive. City editor Glynn Davis is keen to remark he has done a decent job of keeping the business ticking along and fending off various bidders during his tenure (which is an achievement in itself) but also says it must have been frustrating to know what that the only real way of taking the company forward was to use it as a major consolidator in the sector. Although this has happened to some extent with the purchase of Beatties, HoF has still remained a target from even bigger predators.

The latest approach from Baugur looks increasingly likely to give Col eman something akin to 'closure' on his time at HoF with the company playing its final part in the sector's continued consolidation. With the news that HBOS intends to take an equity stake in HoF (as part of Baugur's £350 million approach) the buy-out of the department store group now looks closer than ever.

It certainly seems to make a good fit for the Icelandic operator as its intention to showcase its other retail businesses through concessions in HoF stores makes great sense. It is just such synergies that are an increasing requirement for any private equity-type deals in the retail sector because take-out prices have climbed to the point whereby it is difficult to get the numbers to stack up without them.