Takeover Panel
14 October 2003

2003/23

OFFERS BY

LARAGROVE LIMITED ('LARAGROVE')

AND

BARONESS RETAIL LIMITED ('BARONESS')

FOR

DEBENHAMS PLC ('DEBENHAMS')




On 4 August, Laragrove posted an offer to Debenhams' shareholders. On 29 September, Baroness posted an offer to
Debenhams' shareholders, such offer to be implemented by way of a scheme of arrangement. Neither offer has yet been
declared final and either offer may therefore be increased or otherwise revised.

In order to provide an orderly framework for resolution of the competing offers and in accordance with Rule 32.5, the
Panel Executive has ruled, following discussions with the parties, that except with the consent of the Panel
Executive:


if either Laragrove or Baroness wishes to revise or increase its offer (other than in
accordance with the following procedure) after 5.00 p.m. on Thursday 30 October then that
bidder must lodge any increased offer with the Panel Executive by 4.00 p.m. on Friday 31
October (the 'Auction Start Date'), such increased offer to be announced at approximately 5.00
p.m. that day;


if the bidder with the lower offer at 5.00 p.m. on Thursday 30 October, or if both bidders,
announce(s) an increased offer by approximately 5.00 p.m. on the Auction Start Date then an
open auction procedure shall begin and the bidder with the lower offer following such
announcement(s) shall have until 4.00 p.m. on Saturday 1 November to lodge an increased offer
with the Panel Executive, such increased offer to be announced at approximately 5.00 p.m. that
day;


if the bidder with the lower offer after the announcement(s) at approximately 5.00 p.m. on the
Auction Start Date, or if both bidders, announce(s) an increased offer on Saturday 1 November,
the bidder which then has the lower offer outstanding shall have until 4.00 p.m. on Sunday 2
November to lodge an increased offer with the Panel Executive, such increased offer to be
announced at approximately 5.00 p.m. that day. If the bidder with the lower offer after the
announcement(s) at approximately 5.00 p.m. on Saturday 1 November, or if both bidders,
announce(s) an increased offer on Sunday 2 November, the lower bidder shall have until 4.00
p.m. on Monday 3 November to lodge an increased offer with the Panel Executive, such increased
offer to be announced at approximately 5.00 p.m. that day;


if such an increased offer is announced on Monday 3 November, then the open auction procedure
shall cease to operate. Both bidders shall be invited to submit sealed bids to the Panel
Executive by 1.00 p.m. on Tuesday 4 November specifying a fixed maximum price that each bidder
is prepared to pay. Formula offers will not be permitted. An announcement by the bidder
with the highest offer will, unless otherwise agreed by the Panel Executive, be released by
5.00 p.m. that day;


if, during the open auction, the bidder with the lower offer does not lodge an offer with the
Panel Executive by 4.00 p.m. the next day or if a party is the under-bidder in the sealed bid
process (as appropriate) then that bidder will not be able to amend its offer thereafter;


a further announcement will be made regarding the offer timetable once the above process has
been completed; and


the Panel Executive reserves the discretion to amend the above procedure as appropriate.



Each of the parties has accepted this ruling.

14 October 2003

Can't MoneyAM change the title of this discussion... as the Headline News is very much OUT-OF-DATE.?
Currently DEB is 44p - not looking too good.

Loaded with too much debt.

My problem with DEB is that I don't know what they stand for. Take M&S - quality underwear and ladies fashion that isn't fashionable...and//Food that rich-er folks buy because it tastes better..... probably along with the Restaurant ( even seen the price of a current-bun!).
DEB isn't AFIK a fashion hot-spot... indeed they appear to have a permanent Discount/Sale on - Whilst I'm no fashion-buyer I really don't know why I'd go to DEB - it appears to me to be overpriced "middling" - it's neither Long-Lasting ( as M&S clothing ), nor is it Trendy . . . . but I guess that DEBT is the unspoken reason for the sp slide. I bought a few at 75p (was it?), then it hovered and has only slipped badly since the new Chief started to flex muscles. Naturally any Root/Branch cuts will take time to benefit.... meanwhile their DEBT doesn't appear to have subsided..... Still there's hope...that it doesn't follow BHS . . . . and probably won't as I suspect the Folks running it are all on the level.... doing their best to turn the ship before the rocks break through the hull.
EDIT (24Jan2018)- Funny, I came across IC article for 2009 - and DEB was a Sell at 34p.....not much change there, then! - - - Today sp=29p Oh Dear, Oh Dear.

Debenhams warns on profit after price cuts fail to lure shoppers

Liberum Capital Sell 28.43 40.00 25.00 Reiterates

Liberum view: The company has not made any comment, at this stage, in relation to the press reports, although if the rumours are true it would not come as a great surprise to us. On the negative, it would suggest Debenhams' turnaround strategy to date has not been enough to improve its financial performance to help alleviate the ongoing pressures that have led to three profits warnings and a greater than 50% cut to consensus over the past 9 months. The group continues to rank poorly when looking at a variety of quality metrics – three year forecast EPS CAGR -25%, fixed charge cover (EBIT basis) 1.2x, operational gearing of over 20x and net debt:EBITDA 2.0x. If a positive were to be taken from this newsflow, we believe it is that management is now potentially looking at much more drastic action, which could bring about a more appropriately sized store estate and cost base quicker. This is exactly what we think is required for any successful turnaround to set the business on a path to achieve long-term sustainable profit growth.

IC this week suggested keeping away... pity as I'm already "in" +can't do much at 9p
Fact is Management has "watched the house burn down" (IMHO) . . . they need to be replaced at the very least AND maybe shift to on-line, with short-term "offers" to minimise stock-holding and rapid turnover their cash. But WhatdoIknow?
I think the warning was writ-large when they refurbished their HQ. + Exec discussed their carpets, desks etc. at length......forgetting their business was going to the skip!
EDIT (25Oct2018)-Oh deary, 50+ Store closures and no Divi! sp 9p.

StockMarketWire.com
Beleaguered UK department store group Debenhams on Thursday scrapped its dividend after reporting a full-year loss and said it would close up to 50 of its stores as it continued to grapple with a gloomy retail backdrop.

Faced with tough decisions on stores vulnerable to weaker financial performance, Debenhams said it would close up to 50 stores over 3-to-5 years, compared with the 10 previously identified, as part of a plan to cut costs to achieve profitable growth.

For the full-year to 1 September, the company reported a pre-tax loss of £491.5m, compared with a profit of £59m, like-for-like sales declined 2.3% and earnings (Ebitda) fell 27.5% to £157.3m, below earnings guidance of between £160m and £165m.

The swing to a loss was blamed on exceptional charges relating to the company's redesigned strategy and non-cash exceptional write-downs of £512.4m.

Underlying profit before tax fell 65.1% to £33.2m, below profit guidance of £35m-£40m.

The weak results were exacerbated by a 140 basis points decline in gross margin as the company slashed costs to keep up with competition.

'It has been a tough year for retail in 2018 and our performance reflects that. We are taking decisive steps to strengthen Debenhams in a market that remains volatile and challenging,' said Sergio Bucher, CEO.

'Debenhams remains a strong and trusted brand with 19m customers shopping with us over the past year. Our transformation strategy is gaining traction, with positive results from new product and new formats, general acclaim for our store of the future in Watford and digital growth that is outpacing the market.'

5p possible here.

DEB sp 6p.......I note that several large-retailers are closing stores. Yet I wonder how they can select One store against others - doesn't local events affect buying on the high-street? . If these are large ( Like a rival opening opposite!) - that's understandable, but unlikely to happen in these times.
M&S is another not-dissimilar large store with falling customers. Is this only because of on-line? - This is something we hear often in the News and by Execs trying to hold their jobs! . . . Yet many product need to be seen, felt and compared in the raw as it were.... something you don't need to do with many products which are "Me-too" types and (should) need no comparison, other than availability/price/etc.
DEB has been a real disaster starting with their refurbished HQ near Euston (DYOR) a few years ago when I noted that it's difficult to think of DEB for any particular strength. other than Reductions! . . . [ M&S was "food"]....
Yet executives all-round are "hoping for something to happen" rather than doing a stint in the stores as Recruits.... giving them valuable customer-insight. I guess at current sp we are just waiting for Administrators . . . .
Anyone...?
EDIT(20Dec2018)-sp abt 3p9 now..... are Execs asleep? (- er, "Still"? )

CHRISTMAS TRADING UPDATE



Debenhams plc today announces its trading update for the 6 weeks and the 18 weeks to 5 January 2019.

Financial Summary

· Against a challenging market backdrop, the Group is currently on track to deliver current year profits in line with market expectations[1], supported by further identified cost savings.

· Group gross transaction value for 6 weeks to 5 January declined (3.8)% with group like-for-like sales down (3.4)%. In this period, the UK declined by (3.6)%, with weak store footfall offset by growth in digital.

· For the 18 weeks, group gross transaction value declined (5.6)%, with LFL down (5.7)%. The UK was down (6.2)% with International down (3.5)%. Digital sales have grown by 4.6% across the period.

· The UK trading environment has continued to be volatile, as expected, with clear evidence that our customers have been seeking out promotions. As a result we reinstated some tactical promotional activity in order to be competitive and manage inventory tightly, which will result in some gross margin erosion in the first half.

· We continue to generate cash, with net debt as at 5 January of £286m, within the context of our total committed debt facilities of £520m.

· In light of the requirement to refinance existing bank facilities within the next 12 months, constructive discussions have commenced with lenders, and the group has put on hold any further asset disposals until the outcome of those discussions is known. This process includes options to bring new sources of funding into the business to ensure the appropriate capital structure. We will update on progress with these plans shortly.

Strategic priority update

· After a slow start to the season, group digital sales rose 6.0% in the 6 week period over peak against a strong comparative performance, delivering two year growth of over 20%. This was supported by improved mobile conversion and customer experience.

· New Beauty strategy drove more choice and digital innovation supporting growth in market share in skincare[2] to mitigate decline in premium make-up market.

· Revitalised product has driven improved market share in womenswear[3]; and differentiated gift offer delivered an improved margin performance over peak, with food sales also delivering overall growth of 2% in the 18 weeks.

· Nine stores trading in new design format have outperformed the core chain, with the strongest LFL uplift being seen at Stevenage.

· Previously announced cost savings of an annualised £50m, rising to at least £80m taking into account additional opportunities identified.

Liberum Capital Hold 5.32 10.00 Reiterates

Update on refinancing discussions