Arcadia ends talks with Baugur

Fashion giant Arcadia Group Plc said it has ended takeover talks with Icelandic retailer Baugur as it believed it unlikely the firm would raise the necessary funding within an acceptable time. The announcement took the city by surprise as it had expected Baugur to make a formal takeover bid for the company, owner of the Dorothy Perkins and Top Shop retail chains, in the near future. Due to the news Arcadia shares fell around eight per cent. Arcadia added that its current trading was strong.

On January 9 Arcadia received an approach from Baugur hf., which might have led to an offer for the company. The approach specified a price of 280p to 300p per ordinary share in cash.
Press Enquiries: Arcadia (020) 7636 8040
01 Feb 2002
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Shares Arcadia rise as a result of takeover bid

UK retail giant Arcadia is subject of an investigation by the LS after a possible leak forced it to admit it is in takeover talks. The LSE is reported to have launched a probe into Arcadia share trading prior to negotiations with Arcadia's biggest minority shareholder Baugur which began "a few days ago".

Iceland's largest retail group, might takeover British fashion group Arcadia Group plc. Baugur already has a 20.7 % stake in the British retailer, and is offering 280 to 300 pence per share or GBP 570m (EUR 911.8m) for the remaining 80 %.

The move is not much of a surprise considering that Jon Asgeir Johannesson, Baugur's chief executive, has long been stressing his plans and strong links with the group. In May this year, speculation mounted that Baugur was eyeing Arcadia when it increased its stake from 14.99 % to 20.7 %. Talks were "at a preliminary stage", and there was "no certainty that any offer will result", Arcadia said.

If the deal is successful, Baugur would swallow the fourth-largest European retailer. Baugur's annual turnover of GBP 220m amounts to approx. 14 % of Arcadia's turnover, which presently is GBP 1.6bn for its core brands. Baugur seems to be determined to expand its operations in the clothing industry. The group mainly deals with groceries, but has franchising agreements with British department store group Debenhams, Arcadia's Miss Selfridge and TopShop chains and Zara, the prestigious core brand of Spanish fashion group Inditex. Arcadia's chief executive, Stuart Rose, would benefit from the takeover. On entering Arcadia as CEO he negotiated share options of GBP 17m.
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