Carpetright accepts cut-price £15m rescue deal from Meditor
Carpetright has accepted a cut-price £15.2m bid from its largest shareholder amid fears it cannot pay off its debt pile.
Shares in the company soared more than 14 per cent this morning after its directors unanimously recommended the 5p per share offer from Meditor, a 30 per cent shareholder.
Read more: Major shareholder swallows £41m of Carpetright’s huge debt pile
The pair were in talks last month as Carpetright sought ways to raise £80m to pay off £56m in debts and give it enough cash to grow the business.
Carpetright chairman Bob Ivell said: “We believe the MHL offer is in the best interests of all stakeholders.
“While we have made significant progress with our recovery plan for the Carpetright group, our ability to invest in the future of the business has been constrained against the backdrop of limiting banking covenants and a very challenging consumer market.
“With a recapitalised business and the backing of a committed new owner with the resources to invest in Carpetright for the long term, we will be able to complete our recovery in the private arena and emerge as a stronger business.”
Investment manager and poker player Talal Shakerchi, who owns Meditor, added: “With Meditor’s support and financial backing and without the constraints of a public market listing, Carpetright will be well positioned to compete more effectively.
“This will facilitate substantially increased investment in Carpetright’s committed employees and its store estate as well as driving new initiatives and improvements. I am excited about the long term prospects and opportunities for the Carpetright business.”
Read more: Carpetright mulls £15m takeover bid from largest shareholder
Carpetright has warned the UK’s flooring market remains “challenging”, with wider economic and geopolitical issues at play.
Independent retail analyst Nick Bubb said: “The board of the embattled Carpetright, have, inevitably, thrown in the towel and recommended the 5p bail-out offer from 30 per cent shareholder, the fund manager Meditor.
“It’s not known what the hard-working CEO Wilf Walsh thinks of the situation, but the Chairman, Bob Ivell, admits that “With a recapitalised business and the backing of a committed new owner with the resources to invest in Carpetright for the long term, we will be able to complete our recovery in the private arena and emerge as a stronger business”.
Picture credit: Carpetright