The New York Post is reporting that Baugur, which first expressed interest in buying Saks in an October SEC filing,
will most likely not pursue a bid this year due to a lack of financing
and a slump in Saks' forecast for earnings, which have, "eliminated
potential returns on a leveraged buy," an unnamed source told the Post.
Baugur said in October that it could jointly bid for the American luxury
retailer with Landmark Group, a Dubai retailer owned by Micky Jagtiani. In
April Baugur announced it would focus on making retail acquisitions.
Along with Saks, the investment group announced it could also consider
making an offer for British suit retailer Moss Bros Group plc. However, the only bid Baugur made since then was for Woolworths Group plc last month, and it was rejected based on claims that the bid was too low.
Tight
credit markets have taken their toll on retailers, and the leverage
just isn't there for big buyouts, so many private equity groups are
waiting, and Baugur is no different. But lets face it: If Baugur waits
it out long enough it could get a bargain. Sak's shares fell 6% in morning trading following the Post report.
Baugur is the parent of U.K. department stores House of Fraser plc, Jane Norman women's clothing stores and Whittard of Chelsea
plc coffee and tea retailer. - Maria Woehr
TheDeal.com's: Baugur to sell assets
The Deal.com's: Baugur weighs Saks bid
The New York Post story
Reuters story
Apparently, after a year of pursuing Saks Inc., there are reports Icelandic investment firm Baugur Group hf is unlikely to place a bid for the retailer this year.
