Buyers circle DFS with bid in prospect

Private equity firm Permira and retail sector veteran John Lovering are understood to be circling Doncaster-based furniture group DFS.

The two are said to be planning a buy out bid for the sofa chain, which is owned by Lord Kirkham, and have brought in bankers from Nomura to advise them on the offer.

Lord Kirkham, who at 65 is thought to be nearing retirement, is understood to be considering selling a majority stake in the company, which is valued at more than 500m.

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It was reported at the weekend that bankers at Goldman Sachs are advising him, and invited first round offers for a stake in the group on Friday.

But Permira and Mr Lovering, who was installed as chairman of pubs group Mitchells & Butlers last week following a shareholder revolt, are expected to face stiff competition from other private equity groups, including Cinven and Advent International, who are also thought to be interested.

Despite the current problems faced by retailers, the sector is expected to benefit as the economy improves and consumer confidence increases.

DFS also faces less competition now following the collapse of rivals such as Land of Leather and MFI.

Any deal would trigger a substantial windfall for Lord Kirkham, who took the company private six years ago.

DFS is the UK’s largest sofa retailer with 77 stores.

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