RCM Weekly review - November 2019 - Week 46
This week: Carpetright's largest shareholder to take the company in to private ownership and Clintons cards plan to close 20% of its stores in survival bid.
15th November 2019
Carpetright's largest shareholder to take the company in to private ownership
Carpetright has said it has agreed to be taken over by Meditor, its largest shareholder, in order to repay its debt. The deal values the UK's largest retailer of carpets, flooring and beds at only £15.2 million and will see shareholders receive 5 pence per share in cash, representing a premium of 18 per cent on Thursdays closing price of 4.245 pence. The company announced, "The board believes that the offer (from Meditor) is the only viable route to deliver its requirements for a deliverable, controllable solution to the long-term funding required to make Carpetright a sustainable business"
The move into private ownership comes only a year after the retailer fought off collapse and went for a Company Voluntary Arrangement (CVA) restructuring that closed unprofitable shops and cut rents. The company has said it faced intensify competition from online retailers and rising rents. This coupled with consumer Brexit uncertainty.
Carpetright’s net debt stands at £30-40 Million and it is understood that Meditor intends to provide about £80m of long-term capital to repay this debt and to meet working capital requirements.
11th November 2019
Clintons cards planning a CVA which involves the closure of 20% of its stores in a final survival bid.
High street greeting cards seller Clintons are planning to close 20% of its stores in a final attempt to save the company. The company called a meeting on Friday to warn landlords that it urgently needs to close 66 of its 332 sites in order to avoid collapse. Clintons is also asking landlords to reduce rents on the remaining stores and are seeking to move around 206 stores to a model whereby rent payment a linked to the store’s performance.
It is thought approximate 90 of the company’s store a currently losing money with this number forecast to increase. Consultancy firm KPMG has been appointed to explore all restructuring options. Clintons has said that landlords can air any objection before 20th November.
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