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Letter: Why Didn’t Administrators Wait For Any Other Bidders?
Published on: 10 Aug, 2018
Updated on: 10 Aug, 2018
From Adam Aaronson
In response to: Guildford’s Largest High Street Store Bought by Sports Direct as Part of £90 Million Deal
Is this the fastest pre-pack administration in the retail sector on record? Two hours from announcement of administration to sale, or was it two and a half?
The most recent accounts show inventory at £128 million. Even if that has reduced, owing to difficult trading conditions, the £90 million paid must be close to just the inventory value.
So I wonder why the administrators didn’t wait a day or two to see if there were any potential bidders who would pay more. Often bidders emerge only after a high profile company moves into administration.
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Responses to Letter: Why Didn’t Administrators Wait For Any Other Bidders?
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"Found any?" - "Nope, it all looks green to me!" (See Opinion: The Future is Congested, the Future is Grey)
Mary Bedforth
August 13, 2018 at 2:46 pm
What about the pension scheme? Another BHS situation?
What will the creditors who provided much of the stock valued at £128 million receive? A few pence in the £?
As you say a rapid deal. The vultures circle.
https://www.retailgazette.co.uk/blog/2018/08/house-of-fraser-creditors-determine-fate-today/
Brian Cahill
August 14, 2018 at 12:34 pm
There clearly were other bidders who knew for some time that HoF was at risk and some of those were your classic asset vultures but did not win the bid . Sports Direct may not be everyone’s favourite chain but it is successful and has the resources to underpin HoF even if some of the stores have to go or change.
The Financial Times (13.08.18) in their report “Watchdog eyes House of Fraser deal” quotes administrators Ernst & Young saying, “there was no other offer on the table” apart from Mr Ashley’s. Ed
Adam Aaronson
August 16, 2018 at 7:12 am
The FT article
https://www.ft.com/content/a4d41ad0-9f1c-11e8-85da-eeb7a9ce36e4
also says quite a lot more, including that prior to administration, Philip Day of Edinburgh Woollen Mill offered a lower amount, around £50m for the business as a going concern and that this would have included taking on the pension liabilities. Later in the article a source states that Mr Day would have paid around £100m for the business in administration.
I don’t really know much about this, but I don’t think we are getting the full story.