Carlyle poised to take control of Very Group from Barclay family
Carlyle may retain ownership of Very Group for a period before seeking a buyer
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The US private equity firm Carlyle is reportedly expected to seize control of Very Group later this year, ending the Barclay family’s long-running ownership of one of the UK’s largest online retailers, according to Sky News.
Sources told the outlet that Carlyle, which is the biggest lender to Very Group’s parent company, is likely to assume ownership of the business as soon as October under existing financing terms.
Further talks between Carlyle and other creditors, including Abu Dhabi-based investment firm IMI, are also anticipated in the coming weeks.
IMI acquired part of Very Group’s debt last year through a broader refinancing deal related to the Telegraph newspaper titles.
Sky News has learnt that the move is expected to result in Carlyle converting its debt into equity via a so-called “step-in right”, handing it a majority stake in the retailer, which serves about 4.5 million customers.
Very Group, which owns the Very and Littlewoods brands, is chaired by former Conservative chancellor Nadhim Zahawi. The company borrowed £600m earlier this year from Mayfair-based fund Arini to manage a cash shortfall.
Barclays had explored a potential sale of the business earlier this year but did not launch a formal auction. They have already relinquished control of other assets, including the Yodel parcel delivery service and the Ritz hotel.
The outlet reported that the company’s capital and ownership structure will be finalised before change-of-control rights take effect at the start of October.
Carlyle may retain ownership of Very Group for a period before seeking a buyer. Sources also revealed that IMI is also expected to take an equity stake or a preferential position in the new debt structure.
According to Sky News, prospective bidders are likely to be drawn by Very Group’s financial services division, Very Finance, which generates about one-fifth of the company’s annual sales.
Industry estimates have valued the group at approximately £2.5bn, below previous expectations set by Barclays.
In the 39 weeks to 29 March, Very Group reported a 3.8% fall in revenue to £1.67bn, citing a 15.1% drop in Littlewoods sales as that brand continues to wind down. Sales in the home and sports categories remained strong.
Carlyle and Very Group have been contacted for comment.
