Hunter drops House of Fraser bid

SCOTTISH entrepreneur Tom Hunter has turned his back on department stores chain House of Fraser after the company refused to talk to him about his 85p-a-share takeover offer.

Shares in the owner of the Barkers of Kensington and Army & Navy stores in central London slumped on disappointment that Hunter had walked away from a £200m bid. In early trading, they were down nearly 5% or 3 1/2p to 67 1/2p.

Hunter today said House of Fraser management's unco-operative stance had been the main reason for him withdrawing his offer. A spokesman for Hunter said worries about House of Fraser's debt and stock levels meant it was vital he had a chance to pore over the books before bidding. However, House of Fraser consistently refused to return Hunter's calls, saying he would have to raise his offer just to get through the door.

In a statement to the Stock Market delivered through his vehicle TBH Investments, Hunter said: 'We remain a significant shareholder in HoF and look forward to hearing management's proposals to deliver value in excess of our 85p offer.

Today's decision to pull out came hours before a 'put up or shut up' deadline imposed by the Takeover Panel. Hunter had planned to merge House of Fraser with his other bid target, rival department store chain Allders, to unleash huge cost savings. Hunter has built up an 11% stake in Allders.

He is still thought to be keeping his options open on whether to bid for the Allders chain, although such a move would involve gatecrashing an agreed bid from property group Minerva. Hunter had put together a financing package with Royal Bank of Scotland to bid for House of Fraser.

Analysts were left wondering 'where now?' for HoF. Bid speculation had arrested a dramatic decline in its share price last year, from peaks of 99 3/4p to a low of 46 1/4p. Earlier, chief executive John Coleman expressed caution about the outlook for consumer spending amid evidence of a slowdown in sales growth on Britain's High Streets over Christmas.

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