Carpetright’s third biggest investor, Harris Associates, aims to halt the £850 million acquisition of the retailer by its founder.
The US fund manager, which has an 8.5 per cent stake in Carpetright, believes that the£12.50 a share offered by Carpetright founder Lord Harris – who is unconnected to Harris Associates – is too low.
Harris Associates head of international equity David Herro told the Financial Times: “I don’t think it will go through.”
Although the terms of the deal include a share alternative, giving investors the choice of cash or shares in the new company, many fund managers are barred from taking stakes in private businesses. Herro said that option would be “very, very inconvenient”.
Lord Harris, who owns 23.4 per cent of Carpetright, is backed by the second-biggest investor, Saudi vehicle Olayan, with 14.9 per cent. However, he would probably need 75 per cent support to win bank finance for the deal.