Only a fortnight before, there was confidence that a bid would go ahead at 1,250p a share, but the deal became another victim of credit market instability.
Carpetright sweetened the pill by increasing its interim dividend by 10 per cent, but its shares fell. Broker Panmure Gordon maintained its 1,250p price target and said: “The failure of Lord Harris to secure funding for his take-private proposal is a sorry reflection on banking’s inability to distinguish good business from bad. Carpetright is a well-managed, cash-generative company dominating its niche.”
KBC Peel Hunt, Carpetright’s house broker, argued that the business is worth at least 1,100p on fundamentals and noted: “Carpetright is the largest player in the UK with a 30 per cent share, which we believe it can increase in a challenging consumer environment, with buying power to match, which it can leverage both in the UK and to expand in Europe.”