Vendex set to accept KKR group’s offer

VendexKBB is in exclusive talks with a private equity consortium led by Kohlberg Kravis Roberts for a bid which values the struggling Dutch retail stores group at Euros 1.46bn (Dollars 1.8bn).

KKR; Alpinvest, the Dutch private equity house; and Change Capital, the buy-out vehicle run by Marks & Spencer chairman Luc Vandevelde, fought off competition from a rival bidding party with its Euros 16 a share bid.

The offer is 14 per cent higher than the Euros 14 "indicative" offers Vendex said in February it had received.

Vendex shares yesterday rose nearly 12 per cent to Euros 15.66 in Amsterdam - their highest level since mid-2002 - after it said it was "positively disposed" toward the Euros 16 bid.

KKR, Alpinvest and Change competed against an alliance of UK private equity groups Cinven and Permira.

Stroeve, the Dutch broker, said the bid was in line with its price target. "(It) will find sufficient support in the market, given the initial reactions of some major shareholders."

The broker said it did not believe the private equity consortium would increase its offer and switched its Vendex share recommendation from buy to sell.

The bid, which has the support of Vendex's supervisory board and its board of management, is subject to the completion of due diligence and negotiations on a merger protocol.

Vendex said it expected to provide further information within three weeks.

Vendex reports full-year earnings on Tuesday. Brokers expect sales to dip from Euros 4.7bn to Euros 4.5bn, with earnings before interest and tax down from Euros 304m to Euros 71m.

The shares gained Euros 1.66 to Euros 15.66 in the day's trading, as investors welcomed the announcement that a higher bid had been accepted.

Some had feared a final offer might fail, given the store group's disappointing trading statement issued since the indicative offers were received. Vendex shareholders, including K Capital of the US, have been lobbying for an external financial injection, primarily to turn round the company's loss-making Vroom & Dreesmann department store business.

Change Capital is backed by the Halley family, one of the biggest investors in the Carrefour retailing group of France.