Kesa disclosed on Wednesday that a sale and purchase agreement, valuing BUT at 550 million (£408.8 million), had been exchanged with an acquisition consortium comprising Colony Capital, Goldman Sachs and Merchant Equity Partners.
The retailer said: “Following the receipt of proceeds from the disposal, [the board] will put in place an on-market share repurchase programme to return a proportion of net proceeds.
“The company will remain flexible in relation to the timing and amount, taking into account the company’s share price, balance sheet and cashflow, and any opportunities that might arise to make bolt-on acquisitions on attractive terms.”
Pali International analyst Nick Bubb said a 10 per cent share buy-back would cost£120 million and enhance earnings per share by 7 to 8 per cent. He said: “This is good news and, on a similarly low rating to dismal DSGi for 2008/2009, Kesa still looks cheap.”
The consortium’s interest in BUT was first revealed by Retail Week on October 27.
A deal is expected to be completed in March.
If you have any comment to make on this story, click here.
No comments yet