Ashley scraps £15m Patisserie Valerie bid
mIKE Ashley has pulled his offer to buy bust cafe chain Patisserie Valerie just two days after announcing his interest.
The Sports Direct founder, who has been building up his High Street empire with the purchase of House of Fraser and Evans Cycles, has complained of being shut out of the bidding process.
Patisserie Valerie slumped into administration last month after the discovery of a potential fraud and the arrest of its chief financial officer, Chris marsh. The mail revealed Ashley’s interest last month.
But the 54- year- old, who was recently beaten in his attempt to buy music chain HmV out of administration, has told administrators KPmG that he lacks the information to continue bidding for Patisserie Valerie.
Ashley’s decision casts fresh doubt over the future of the chain as it looks for a new owner. It has shut 72 cafes, axing 900 staff. Around 2,000 jobs are at risk at more than 100 sites which are still trading.
In a letter seen by the Financial Times, Sports Direct’s deputy finance head Chris Wootton wrote to KPmG’s David Costley-Wood saying Ashley’s firm had made a ‘serious and substantial offer’ in excess of £15m. But Wootton claimed that Sports Direct was told it would need to increase that offer by as much as £2m.
Ashley then decided to back off. other bidders are thought to be interested including coffee chain Costa and David Scott, the former owner of Druckers who sold his business to Patisserie Valerie a decade ago. In the letter, Wootton claimed that Sports Direct ‘had not been allowed access to a data room, any financial information or meetings with management’.
He added that the financial information in the public domain ‘is at best unreliable, putting Sports Direct at a serious disadvantage as a bidder’.
A £40m black hole was discovered in the accounts last october, and chief executive Paul may resigned soon after the scandal emerged. Although Patisserie Valerie has installed turnaround specialist Steve Francis as boss, Wootton claimed Ashley had not been invited to meet him.
The letter went on: ‘ Sports Direct has reluctantly decided withdraw its offer, as it is not able to match an offer of £18m-plus without having access to any due diligence, financial information or management meetings.’ Ashley’s retail empire includes Sports Direct, House of Fraser, Evans Cycles, Flannels and Sofa.com.
The critical letter is blow to Patisserie Valerie’s chairman Luke Johnson, who owned 37pc of the firm and tried to keep it running by plugging it with millions of pounds of his own.
A string of investigations into what went wrong at the firm are being carried out and Patisserie Valerie’s former auditor Grant Thornton is being probed by accountancy watchdog the Financial reporting Council. KPmG and Sports Direct could not be reached for comment last night.