The Raven Group

The Times, November 2003
Ingrid Mansell

Suitor emerges as Austin Reed issues warning

ANTON BILTON, the millionaire grandson of the late property tycoon Percy Bilton, has emerged as a surprise potential suitor for Austin Reed as analysts said that a profits warning from the fashion retailer left it looking "extremely vulnerable" to a takeover.

While Mr Bilton, 39, refused to comment, The Times has learnt that he is mulling a bid for the classic clothing retailer, which has already attracted interest from five potential bidders this year. Property sources claimed that Mr Bilton has access to sufficient cash resources to buy the group - last night worth about £43 million - outright, but that he is more likely to fund part of any acquisition with debt.

Mr Bilton's interest in Austin Reed emerged as the company issued a warning that poor trading in recent weeks would leave full-year profits "significantly lower" than market expectations. The statement sent the stock plunging 28 per cent to 107 1/2p in morning trading, before it recovered to close at 136 1/2p, down 8 per cent. Analysts put the recovery down to renewed takeover speculation.

A spokesman for Austin Reed said last night: "It is true that a depressed stock price plus a great business with good prospects equals an attractive proposition. But that does not mean shareholders want to sell out on the cheap."

Richard Ratner, retail analyst at Seymour Pierce, said that to be successful an offer would have to be pegged at about 160p a share, valuing Austin Reed at just over £50 million.

The retailer, with 140 shops including a flagship Regent Street store, is battling against falling sales and a £10 million pension deficit.

In June the company said that it had rejected preliminary offers from the family of David Rowland, the property developer. Slater Menswear, the Glasgow retailer, also expressed interest but failed to raise the funds. Nigel Robertson, the grandson of Austin Reed's founder, could not win support from Harold Tillman, the new owner of Jaeger, for a joint bid and then failed to raise capital through WestLB bank. Richard Thompson, former chairman of Queens Park Rangers Football Club, showed interest in bidding for Reed but said he would not pay more than £44 million.

Shami Ahmed, the Joe Bloggs jeans entrepreneur, has been in the wings since buying an interest in the company of about 9.6 per cent this year.

Austin Reed, which recently completed a £12 million revamp of its Regent Street store, said yesterday that trading conditions had deteriorated since the company reported its interim results last month, with like-for-like sales down 11.7 per cent over the 15 weeks to November 22. This compared with a 6 per cent fall in underlying sales in the first eight weeks of the second half.

Analysts who had hoped the group would produce full-year profits of just over £5 million excluding exceptional items yesterday cut their forecasts to a shade above £1 million.

BILTON'S BEST BUYS
1998: Buys NCP car park on Wardour Street, London, for £10.5 million.
1999: Helps to buy Pillar Property's office portfolio for £78 million.
2002: Buys High Royds hospital site, near Leeds, for £26 million. The deal is one of 11 hospital acquisitions. Also buys stake in Durlacher, the stockbroker turned investment bank, and a "significant" stake in Warner Bros Studio Stores UK. 2003: Buys Po Na Na, the failed bar and nightclub operator, for £7 million.

Suitor emerges as Austin Reed issues warning

ANTON BILTON, the millionaire grandson of the late property tycoon Percy Bilton, has emerged as a surprise potential suitor for Austin Reed as analysts said that a profits warning from the fashion retailer left it looking "extremely vulnerable" to a takeover.

While Mr Bilton, 39, refused to comment, The Times has learnt that he is mulling a bid for the classic clothing retailer, which has already attracted interest from five potential bidders this year. Property sources claimed that Mr Bilton has access to sufficient cash resources to buy the group - last night worth about £43 million - outright, but that he is more likely to fund part of any acquisition with debt.

Mr Bilton's interest in Austin Reed emerged as the company issued a warning that poor trading in recent weeks would leave full-year profits "significantly lower" than market expectations. The statement sent the stock plunging 28 per cent to 107 1/2p in morning trading, before it recovered to close at 136 1/2p, down 8 per cent. Analysts put the recovery down to renewed takeover speculation.

A spokesman for Austin Reed said last night: "It is true that a depressed stock price plus a great business with good prospects equals an attractive proposition. But that does not mean shareholders want to sell out on the cheap."

Richard Ratner, retail analyst at Seymour Pierce, said that to be successful an offer would have to be pegged at about 160p a share, valuing Austin Reed at just over £50 million.

The retailer, with 140 shops including a flagship Regent Street store, is battling against falling sales and a £10 million pension deficit.

In June the company said that it had rejected preliminary offers from the family of David Rowland, the property developer. Slater Menswear, the Glasgow retailer, also expressed interest but failed to raise the funds. Nigel Robertson, the grandson of Austin Reed's founder, could not win support from Harold Tillman, the new owner of Jaeger, for a joint bid and then failed to raise capital through WestLB bank. Richard Thompson, former chairman of Queens Park Rangers Football Club, showed interest in bidding for Reed but said he would not pay more than £44 million.

Shami Ahmed, the Joe Bloggs jeans entrepreneur, has been in the wings since buying an interest in the company of about 9.6 per cent this year.

Austin Reed, which recently completed a £12 million revamp of its Regent Street store, said yesterday that trading conditions had deteriorated since the company reported its interim results last month, with like-for-like sales down 11.7 per cent over the 15 weeks to November 22. This compared with a 6 per cent fall in underlying sales in the first eight weeks of the second half.

Analysts who had hoped the group would produce full-year profits of just over £5 million excluding exceptional items yesterday cut their forecasts to a shade above £1 million.

BILTON'S BEST BUYS
1998: Buys NCP car park on Wardour Street, London, for £10.5 million.
1999: Helps to buy Pillar Property's office portfolio for £78 million.
2002: Buys High Royds hospital site, near Leeds, for £26 million. The deal is one of 11 hospital acquisitions. Also buys stake in Durlacher, the stockbroker turned investment bank, and a "significant" stake in Warner Bros Studio Stores UK. 2003: Buys Po Na Na, the failed bar and nightclub operator, for £7 million.