LORD KIRKHAM looked poised to win the battle for DFS last night after three major shareholders sold their stakes in the furniture retailer.
The three sold about 17 per cent of DFS’s shares over the past two days, with analysts predicting that most were likely to have been picked up by hedge funds, which are highly likely to vote in favour of Lord Kirkham’s 455p-a-share bid.
Newton Investment, the company’s largest shareholder, sold its 10 per cent stake at 450p on Thursday, netting it £47.88 million. Yesterday, New Star Asset Management sold its 2 per cent stake for about £10 million, while Jupiter Asset Management sold its 4.6 per cent stake for £22.2 million. DFS shares rose 15p to 451¼p.
Richard Ratner, of the stockbroker Seymour Pierce, said: “Newton was obviously not prepared to hang out against a bid but also wasn’t prepared to lose out if the bid didn’t go through. It now looks as though things are going Lord Kirkham’s way.”
Analysts said it was highly unlikely that the shares had been bought by Lord Kirkham because under the scheme of arrangement rules he is unable to vote with his own shares.
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One banker said: “The hedge funds are the most likely buyers. They have probably realised that if the deal doesn’t go through, the share price could drop back to as little as 90p and they will lose a lot of money. Why not invest more and then vote in favour of the deal so they can make a profit?” Lord Kirkham, who controls 10 per cent of the shares, needs to secure a minimum of 67.5 per cent of shareholder votes through his scheme of arrangement.
The deal had stood on a knife edge because Newton had refused to reveal whether it was planning to accept the offer, while other major shareholders, including Morley Fund Management, which has a 6.37 per cent stake in DFS, had said they would try to block the takeover.
Shareholders are set to vote on the deal at an extraordinary general meeting on September 27.
Lord Kirkham raised his bid by 10p a share earlier this month to £507 million, in an attempt to win over investors who had dismissed his initial offers as too low. He told investors the bid was “final” and “would not be increased in any circumstances”.