MFI Management To Buy Out Unit of British Retail Giant Asda-MFI
LONDON (AP) _ Retail giant Asda-MFI said Monday it would sell its MFI furniture unit for 505 million pounds, about $820 million at current exchange rates, to a company formed by a management-led group.
MFI chairman Derek Hunt put together the company, MFI Furniture Group PLC, which also will pay 200 million pounds, about $325 million, for Hygena Ltd., MFI’s main supplier of kitchens.
Asda bought MFI two years ago for 593 million pounds. Earlier this year, the company said it planned to concentrate on its stores section and sold off two other peripheral businesses.
Group executives who invested money toward the buyout will get shares in the company when it comes to the stock market within three years.
Asda will pay 52 million pounds to retain a 25 percent stake in the new company, thus getting the option of raising more cash by selling out once the shares are quoted.
The balance of the new company will be held by the various financial institutions that backed the deal.
Robert Smith, managing director of Charterhouse Development Capital, which arranged the buyout, said he saw it as ″a watershed″ that will lead to larger such buyouts in Britain.