Rumours circulate around Carpetright privatisation plans

No less than six profit warnings in a year has left Carpetright’s share price threadbare.

Britain’s biggest floor covering retailer, with 643 stores, continues to be hit by the weak UK housing market and the reluctance of cash-strapped homeowners to buy big ticket items.

City analysts have all year been busy slashing full-year profit forecasts towards the £11m level, down from last year’s £16.9m.

Carpet king and chief executive Lord Harris of Peckham, who over the years has had very few good words to say about the City, is said to be coming to the end of his tether.

A yarn doing the rounds among trade sources suggests Lord Harris, who owns 18.8 per cent of the equity, is ready again to roll out plans to take his ‘baby’ private at £469m, or £7 a share. As rumours circulated in the market, the shares climbed 23.75p to 578.75p. The 52-week high was 771.5p.

In 2007 Lord Harris failed in an attempt to take it private at 1250p a share. He wanted then to free the company’s management from the confines of public ownership to expand more quickly. His intentions remain the same and dealers believe he has been sounding out major shareholders of late about the possibility of doing a deal.

Olayan, a Saudi investment group, with 14.9 per cent is said to be already on side, while Chicago-based Harris Associates, which owns 11 per cent, still needs to be persuaded. As does billionaire Bill Gates, who sits on 6 per cent of the stock via his personal investment company Cascade Investments.

Source : Geoff Foster – ThisIsMoney.co.uk
www.thisismoney.co.uk/money/markets/article-2100615/MARKET-REPORT-Six-profit-warnings-year-leaves-Carpetrights-share-price-threadbare.html