- Carlyle and CVC decide against bidding for Shop Direct
- Concern about retailer’s reliance on consumer credit behind decision
Some leading private-equity houses have decided against bidding for home shopping giant Shop Direct.
Concerns about Shop Direct’s reliance on its consumer credit business have put some potential bidders off, Sky News reported.
The deadline for initial offers for Shop Direct was this week, but big private-equity names including Carlyle and CVC Capital Partners chose not to go ahead, according to bankers close to the process.
Shop Direct’s owners, the Barclay brothers, who have owned the retailer for 15 years, had reportedly hoped it would attract a price-tag of £3bn, although no value was formally set during discussions with potential buyers.
Other private-equity houses thought to have held talks with Shop Direct include Advent International, Bain Capital, BC Partners, Cinven and Permira.
It was unclear whether any of them have made formal offers.
One City source told Sky that Shop Direct was “comfortable” with the level of investor interest.
However, some analysts fear that tough consumer finance regulation is putting off private-equity groups from paying a premium price for Shop Direct, which is a big provider of consumer credit.
Bankers said that uncertain consumer confidence as the UK prepares to quit the EU might also have deterred potential buyers of Shop Direct, which owns brands such as Very.
It is possible that a minority stake in Shop Direct may be sold, rather than the entire business.