LONDON Dec 4 U.S. private equity firm Clayton,
Dubilier & Rice is in talks about raising debt to help pay for
its acquisition of a controlling stake in British discount
retailer B&M, bankers said on Tuesday.
The deal, which values B&M at 965 million pounds ($1.55
billion), will be backed by roughly equal amounts of debt and
equity, bankers said.
While CD&R has debt financing in place from Bank of America
Merrill Lynch, it wants to expand the group of banks that will
provide around 450 million pounds debt to back the transaction.
B&M, owned by brothers Simon, Bobby and Robin Arora, has
over 300 stores throughout Britain and employs over 10,000
staff. The Liverpool-headquartered group sells a range of
products including toys, furniture and foodstuffs, according to
its website which describes itself as a variety retailer.
Banks which are close to the deal include Credit Suisse,
Goldman Sachs, ING and Royal Bank of Canada, banking sources
said, adding lenders were due to be appointed later this week
and the debt will be syndicated to institutional loan investors
The debt package will be provided through senior leveraged
loans and will total around 4.25-4.5 times B&M's approximate
100-110 million pounds EBITDA (core earnings).
CD&R won the auction process after final round bids were
submitted last week. Other private equity firms that had been
interested included Advent, Blackstone, BC Partners and KKR, as
private equity firms spotted value in a discount retail sector
benefiting from a tough economic environment.
B&M was advised by Rothschild and CD&R was advised by Bank
of America Merrill Lynch.
Former Tesco chief executive Terry Leahy, who is a senior
operating adviser at CD&R, will serve as chairman of B&M.