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Takeover approaches boost SR Gent shares

Nigel Cope
Thursday 24 October 1996 18:02 EDT
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SR Gent, the Marks & Spencer clothing supplier which announced last month that it was in crisis talks with its bankers, has received at least two takeover approaches, writes Nigel Cope.

The company said yesterday it had received preliminary approaches from several parties that could lead to an offer. SR Gent shares rose 17 per cent to 62.5p on the news. At this price the company is valued at pounds 22.7m.

Any takeover would have to be agreed by the group's two leading directors - the chairman, Peter Wolff, and Peter Wetzel, who jointly hold 62 per cent of the shares.

Talks are at an early stage and discussions with bankers about a potential refinancing are continuing.

Last month, the company's shares plunged by 41 per cent when it said it was taking a pounds 14m charge to cover the cost of closure of its Clothing Barn retail chain, which had been hit by poor margins and weak sales.

The announcement forced the company to delay publication of its results for the year to June. These have still not been released.

Like William Baird, SR Gent intends to focus on its main business of supplying clothing to M&S. SR Gent supplies M&S with ladieswear such as blouses, dresses and skirts. This business accounts for 90 per cent of group sales.

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